Market Radar 25. October 2022

At 380 No more funny?

Yesterday evening around 21:20 German time was in the SPY end with Lustig. The 380 mark seemed to have been the right time for institutions and some day traders to take profits. If you trade the SPY and are currently not in it, you could place an STP buy order over 380. If this mark is exceeded intraday, the SPY could dare a sprint towards 390.

China and copper

China, of course. The reaction of the stock market to the re-election of Xi Jinping for a third term was clear. Is capital now being withdrawn from China not only selectively, but strategically? Does this cementing of power now also have a negative impact on the global economy?

On Monday, we saw relative weakness in mining stocks, especially copper mines, in addition to China Tech stocks. According to risk-on/risk-off logic, this should be a sign of risk-off. As an industrial metal, copper is a very sensitive and usually leading indicator of the global economy.

Let’s take a look at Southern Copper (SCCO) stock. The company operates copper mines exclusively in Latin America. The black candle yesterday was extremely humorless. From October 4 to 21, SCCO formed a nice flat base after an up-move, which looked so productive that it should only be a short break for technical analysts on the way up.

This route plan is now endangered with the candle yesterday. Yesterday’s weakness is accompanied by a sharp slide in Brazil (country ETF with symbol EWZ). I’m not going to build short trade in SCCO – especially not in Latin American countries ETFs – but I’m going to keep an eye on the stock. Whether the weakness in copper is related to the elections in China, I cannot judge here.


Presumably there will be a striking up gap today

Let’s look at Calix (CALX) again, next to Extreme Networks (EXTR) my top pick from the ETF for Multimedia Networkers (IGN). Calix published quarterly figures yesterday after the stock exchange. These were really good. In the after-hours period, the stock rose by 7%. I will probably let myself be stopped in the stock today, as long as the Up movement can be held at the opening.

Technically, such an up-gap would now create a nice pivot point in the chart image, which really catches everyone’s eye immediately. I consider the software company Calix Corp. as a member of the industry “Multimedia Networker”, which is currently by far the strongest industry in the technology sector: Day stamp “Buy or top-up” !