SVET Markets Update (Mon, Dec 19 - Tu, Dec 21)

22 Dec 2022 by rate3

Monday, December 19, we tasted a piece of bull's happy-meal taken straight from the 2021 cooking book. The National Association of Home Builders reported Housing Market Index contraction to 31 instead of 32 (expected by most analysts). That must not have been the big deal as this index was continuously falling for months from its picks (84) achieved in December 2021 to its preset levels previously seen only in March 2020. Sure, it didn't add the enthusiasm to players as well. NASDAQ sliding another 1.5 (from 10707 to 10546) percent during the day was a prove. However, on dormant weekends' markets, you rarely see any action without someone skillfully orchestrating its. That exactly what happened at about 2 pm (PST) when the classical bear trap was played. In a matter of minutes BTC mini-crashed from 16609 to 16256 (2.1 percent) breaching its lowest (since Dec 16) support and collecting a bunch of bull's stop-losses. Many traders, already tense after seeing NASDAQ forming a big-fat red weekly candle, sold on a small correction. Naturally, BTC reacted immediately by going north even further and reaching 16880 (3.8 percent gain for daring Bulls). Congratulation! :)

Building Permits continue to fall precipitately reaching 1.342 million in November as reported by the Census Bureau on Tuesday, Dec 2022. Permits, which stood on its historic highs of 1.9M in November 2021 (previous records: 2.4M in Jan 1973, 2M in June 78 and Feb 84, 2.3M in Oct 2005), tumbled for more than 11 percent during a month (1.512M in October). It helped NASDAQ to recover from 10490, attained during the preceding week, to 10585 (0.9 percent) on the opening hours. The leading tech index closed on 10547 despite some mid-day profit-taking. BTC, which had already experienced a small rally after CeFi markets closure on Dec 19, hold itself under 17K with a brief attempt to breach it right after Permits data hit the markets at 6:30 AM (PST).

Wednesday's NASDAQ took its bull energy (rising from 10592 to 10742 or 1.4 percent while BTC have been holding its ground lingering 16700 and 16900 during the day) from the National Association of Realtors' data showing Home Sales sharply dipping to 4.09M (7.7 percent) in November. At the same time, 30-years mortgage rate fall to 6.34 percent continuing the down trend started in mid-October (7.14 at that period) and following 10-year Treasury bonds (slided from 4.2 in October to 3.66 in December). As a reminder: October 3rd marked the moment when 3-months-bonds curve crossed 10-years-bonds one - one of the classical indications of the upcoming recession (short terms risks exceed the long-term ones). 3-months yield grew from 0.05 percent (Dec 2021) to 4.2 (Dec 2022) showing 83x increase as investors saw the probability of the economic downturn growing each month since the beginning of Powell's war against the prosperity.