Wednesday, November 9, 2022

Morning Note: Clarity Yet to Come

As you'll see if you catch this morning's yet to be produced technical update video, the short-term setup for stocks is a little suspect right here.

As for sentiment, traders and investors, on balance, lean somewhat more positive than they were, say, early October, which, frankly, is having me a bit short-term hesitant right here... Although the latest scoring of our own fear/greed barometer still reads net fear, which, in a contrarian sense, is still net bullish. 

While our short-term base case has it that odds favor more upside as we meander through Q4, we expect to have more clarity once the market digests tomorrow's October CPI print and, not to mention, the ultimate mid-term results... 

Keeping this one short, more coming your way via video in a bit.

Asian equities were mixed overnight, with 9 of the 16 markets we track closing higher.

Europe mostly red so far this morning, with 15 of the 19 bourses we follow trading down as I type.

US stocks are red to start the session: Dow down 266 points (0.81%), SP500 down 0.77%, SP500 Equal Weight down 0.67%, Nasdaq 100 down 0.72%, Nasdaq Comp down 0.78%, Russell 2000 down 1.25%.

The VIX sits at 25.28, down 1.02%.

Oil futures are down 1.55%, gold's up 0.18%, silver's up 0.51%, copper futures are up 0.65% and the ag complex (DBA) is flat.

The 10-year treasury is down (yield up) and the dollar is up 0.53%.

Among our 35 core positions (excluding options hedges, cash and short-term bond ETF), only 6 -- silver, Albemarle, Mexico equities, healthcare stocks, gold and defense stocks -- are in the green so far this morning. The losers are being led lower by Disney, Dutch Bros, AMD, energy stocks and base metals miners.

Bottom line!
"...a country’s economic freedom predicts its prosperity better than its mineral wealth, education system or infrastructure do. In a sample of 127 countries, the sixty-three with the higher economic freedom had more than four times the income per capita and nearly twice the growth rate of the countries that did not."

--Ridley, Matt. The Rational Optimist: How Prosperity Evolves 

Have a great day!

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