These moves are not regular moves but rare fat tail
distribution that exhibits a large skewness towards upside relative to that of either a normal distribution or any other normal day.
This happened mainly because
The $DXY Dollar Index is suffered its biggest single-day drop (-1.94%) in a long time.
Metal stocks and dollar index have negative correlation.
This is the biggest drop in DOLLAR INDEX since December , 2015!
But why did the dollar correct so much ?
U.S. DOLLAR sinked more than 1% after jobs data showed firm labor market but slowing wage growth.
Nonfarm payrolls increase 261,000 in October
The world's largest economy added 261,000 jobs in the month of October, down from an upwardly revised level of 315,000 in September.
Unemployment rate rises to 3.7% from 3.5%
Non-farm payrolls report showed a rise in d unemployment rate to 3.7% last month from 3.5% in September, suggesting some loosening in labor market conditions that could give d Fed cover to shift towards smaller rate increases next month.
Smaller rate increase means less hawkish fed.
Less hawkish fed means weaker dollar.
The $DXY Dollar Index has traded 362 consecutive days above its 100-day simple moving average.This is the longest duration for which dollar has traded above 100 SMA. Chances of good mean reversion are present here.
If you look on the derivative's front then mostly all the counters saw increase in the open interest.
That's pretty much it.
Any new trend develops in the market and you don't track the technicals so closely ,don't worry
I have got you covered.
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In this thread will share an account of trend reversals, chart setups and my thought process in 2023.
So I have not been bearish from the last week but from the very start of the year when everyone were expecting " ALL TIME HIGH " and 19,000 on nifty and -20,000 on Nifty.
First even I had the perception that markets will breakout and we may see a ferocious rally but once charts started becoming bearish and SLs got hit , I changed my view from bullish to bearish.