1. Jobs Friday, Times Two
There’s no major economic data today, but keep in mind that on Friday, we get employment numbers from both Canada and the U.S.
Right now, 14,000 jobs are expected to be created in Canada and 63,000 in the U.S.
Remember, last month Canada reported a massive decline in jobs, while the U.S. reported a very low number, along with significant revisions.
Beyond that, we have interest rate decisions from the Reserve Bank of Australia and the Bank of England. We’ll also hear from FOMC members and from the Governor of the Bank of Canada on Thursday.
2. Iran Opens the Door to Talks: Oil Gets Some Relief
There’s some relief in the oil market, with Iran’s Supreme Leader saying the government has the authority to hold talks with the U.S.
This is easing some pressure in the oil market, but tensions remain, given all the warnings about attacks resuming after the midterms, which are on Tuesday. It will be worth watching how this plays out.
Interestingly enough, if you recall, not too long ago, Trump said oil prices would decline after the midterms. Interesting.
We’re tracking this closely. There’s talk about possible nuclear strikes on Iran, but there’s also talk about peace being reached very soon. We’ll find out, and the oil market will react regardless.
3. Gold Breaks a Months-Long Floor
The move in gold on Friday was massive, as prices broke below $4,000. That level had held for a very long time.
If you go back, you’ll find that between June and August, gold kept testing that level and wouldn’t drop below it. Then, on Friday, the selling came, and gold broke below $4,000.
This morning, gold is bouncing a bit, and it wouldn’t be shocking to see a retest of $4,000. We’ll see how it goes. If gold isn’t able to get back above $4,000 and selling momentum continues, there’s a decent case for gold hitting the $3,300 to $3,500 range.
Silver broke below $50 on Friday. It’s also bouncing and retesting the $50 level. We’re tracking this closely. The silver chart looks much worse than gold’s at the moment, but there’s major support for silver between $45 and $47.
Mind you, we’ve been warning about what could happen to gold and silver prices for months. At this point, it shouldn’t be surprising whatsoever.
4. Dead Cat Bounce or Real Relief for Stocks?
The S&P 500 has dropped below its 50-day moving average. We’ve been tracking this for days now. It initially bounced back above its 50-day moving average but couldn’t hold.
Let’s see how today ends.
The move on Friday was big, and there’s usually a relief rally or a dead cat bounce, as some might call it after big red days. Let’s see how today and the next few days go.
We’ve also got employment data as a catalyst later in the week, plus the midterm elections on Tuesday, which obviously have the potential to move the market.
From a seasonality perspective, keep in mind that mid-November to December tends to be uneventful for the stock market. But that doesn’t mean nothing can go wrong. Those who have been around may remember what happened in 2018, when the stock market plummeted in December just before Christmas. That’s something to watch as well.
If the geopolitical situation gets under control, there could be a relief rally in the stock market.
5. Bitcoin Holds the $76,000 Line
Bitcoin continues to trade around $76,000 to $77,000, which is a big support level. A break below $76,000 will make Bitcoin look ugly. There’s a lot of noise around Binance and the hacks that have happened. Also, don’t forget: the crypto world needs a narrative.
The Canadian dollar is strengthening a little against the U.S. dollar this morning. It has crossed above its 50-day moving average, but the 200-day moving average is still above and could act as resistance.
The euro is bouncing a little against the U.S. dollar today, but the chart looks weak. There’s a lot of noise around Europe, and a lot of problems could come out of there in the coming months. It wouldn’t be surprising if Europe became the epicenter of some sort of crisis.
Yields continue to slide lower, with the 10-year now at 4.9%. That’s a decent move to the downside.