Technical analysis: oil stocks rally as crude tops 107 dollars, Circle and Coinbase stock sink before the Fed, and the ten-year yield hits 5%

Press reports put the US ten-year Treasury yield at 5% for the first time since the summer of 2007, with an intraday high of 5.04% and a close near 5.01%: the fifth consecutive rise. The thirty-year stays above 5.3%. This is not a technical move: it is the market positioning ahead of today's Federal Reserve statement, which traders price at 91% as the first 25 basis point increase since 2023.

Wall Street closed lower without shocks. On our data S&P 500Long, the ETF on the S&P 500, lost 0.46%, Invesco QQQ TrustLong on the Nasdaq 100 lost 0.65% and Russell 2000 ETFShort on small caps 0.96%. The most bought name of the day was Qualcomm stocksLong, up 4.25%, followed by Danaher stockLong, up 3.01%, and Arista Networks stockLong, up 2.68%.

The second theme of the session came again from the Gulf, and this time the stocks followed. Press reports put Brent above 107 dollars and US crude up around 2% beyond 104, the highest in more than four months, driven by fresh strikes between the United States and Iran over the weekend and by an understanding between the US administration and Venezuela over control of more than 65 billion barrels of reserves. On our data crude rose 4.4% in the session and 23% over four weeks.

The chain rallied together: Valero stockLong up 3.68%, Marathon Petroleum stockLong up 3.63%, ConocoPhillips stocksLong up 3.33%, Petrobras stockLong up 2.93%, Occidental stockLong up 2.82%, Chevron stockLong up 2.64%, Exxon stockLong up 2.57% and BP stockLong up 2.24%. XLELong, the ETF on US energy, gained 2.17%, the only one of eleven sectors in the green. In Brazil Petrobras ordinary sharesLong closed up 3.63% and UsiminasLong up 3.27%.

The news of the day came from the Italian competition authority, which opened a formal investigation into the transaction through which Intesa Sanpaolo intends to acquire exclusive control of Monte dei Paschi through the exchange offer launched on 8 June. Under scrutiny are the effects on competition across numerous banking and insurance markets, both local and national, including the relationship between Intesa and Generali in the production and distribution of policies. On our data Intesa Sanpaolo stockLong lost 0.19%, Monte dei Paschi stockLong gained 1.53% and MediobancaLong 1.43%.

The rest of the market split between those holding oil and those holding rates. Higher: Tenaris stockLong up 3.30%, Eni stockLong up 1.75%, SaipemShort up 1.56%. Utilities were bought as shelter: TernaShort up 2.87%, ItalgasShort up 1.14%, SnamShort up 1.10%. Also higher Leonardo stockShort, up 1.26%, NexiLong up 1.15% and GeneraliLong up 0.93%. Rates hurt UniCredit stockLong, down 2.24%, BPERLong down 1.66% and Banco BPMShort down 0.43%; also lower Moncler stockShort, down 1.98%, LottomaticaLong, down 1.29%, and Stellantis stockShort, down 1.17%. Press reports put the Milan index down 0.1%, the best in Europe; the ETF that tracks it, on our data, down 0.21%.

The hardest hit corner was crypto, where Bitcoin's drop was multiplied on the listed proxies. Circle stocksLong lost 11.41%, Coinbase stocksLong 10.10%, Riot Platforms stockShort 5.97% and Strategy stockLong 5.36%. Press reports point to a double unknown: the Senate vote on the bill meant to give crypto a clear regulatory framework, and the rate decision.

Banks fell after the chief executive of Bank of America warned at the Barclays conference that third quarter investment banking fees will drop more than 10% year on year, with trading broadly flat: on our data Goldman Sachs stockShort lost 1.19%. Also lower Take-Two stockShort, down 4.93%, Dutch Bros stockShort, down 4.70%, and XPeng stockShort, down 4.48%, with discretionary consumption the last sector on the grid at minus 1.75%.

Press reports put the Stoxx 600 down 0.6%, at a three month low, with banks last. On our data Deutsche Bank stockLong lost 2.37%, HSBC stockLong 2.15% and SanofiLong 1.62%; EXV1Long, the ETF on European banks, shed 0.94%. The widest fall on the continent, though, belongs to London Stock Exchange stockLong, down 3.23%.

Bucking the trend were German utilities and the data centre names sold on Monday: RWE stockLong up 1.53%, Schneider Electric stockLong up 1.19%, Infineon stockShort up 0.54%, Siemens Energy stockShort up 0.26%. Software held with SAP stockLong up 0.44%, while SiemensShort lost 1.15%, Bayer stockLong 1.26% and Dassault SystemesShort 1.13%. EXH1Long, the ETF on European oil and gas, led the continent with 1.27%.

On Tuesday FTSE MIB ETFShort, the ETF on the FTSE MIB, lost 0.21%, DAX ETFLong 0.22%, FTSE 100 ETFLong on the FTSE 100 0.42% and CAC 40 ETFShort 0.43%. Four almost identical declines inside a two tenths of a point range: the most compact session on the continent in weeks.

Below that surface the positions are very different. Milan has been on a sell since the week ended 4 September and the typical price of the week in formation sits 2.96% below the exit level: the signal is working with a wide margin. Paris has been on a sell since 24 August. London stays on a buy from April, with the weekly in formation holding. Frankfurt, on a buy from April, still carries a provisional sell on the candle in formation, with the typical price now 2.82% below the new level, against 2.63% on Monday.

XLE — the Energy Select Sector SPDR, that is the energy ETF — gained 2.17%, first of eleven sectors and the only one in the green. VDE — Vanguard Energy, the Vanguard energy ETF — closed up 2.23%, confirming the move on a broader basket. At the opposite end XLY — the consumer discretionary ETF — lost 1.75%, last on the grid, and XLU — the utilities ETF — 1.20%.

SOXX — iShares Semiconductor, the semiconductor ETF — closed up 0.29% after Monday's 5.63% fall: the sector stopped rather than continued. GLD — SPDR Gold Shares, the most traded gold ETF in the world — lost 1.56% with the dollar firming and yields rising, a fourth consecutive week of decline for the metal.

The weekly cohort was born at Friday 11 September's close: 15 new buy signals, 10 tradable. From Tuesday to Friday this card publishes only what changes — who crosses above or below their entry level, who flips side on the daily signal, who reports earnings, who leaves the cohort.

Yesterday there was a single change, and it belongs to Qualcomm stockLong: with the session's 4.25% it crossed back above its own entry level. Nobody flipped side on the daily signal, which stays a sell on Nokia stockLong, LegrandLong, Micron stockLong and Taiwan Semiconductor stockLong as the day before, and none of the fifteen reports earnings in the next seven days.

Four companies in our universe report between now and next week, the first two right around the Federal Reserve decision.

Wednesday 16 September

MFE-MediaForEurope Short

Thursday 17 September

Carnival Short

FedEx Long

Thursday 24 September

Costco Wholesale Short

SPY, the ETF on the S&P 500 S&P 500Long, closed Tuesday down 0.46%; QQQ, the ETF on the Nasdaq 100 Invesco QQQ TrustLong, down 0.65%. Applying sector moves to each basket's weights, SPY should have lost 0.44% and QQQ 0.61%: two and five hundredths of a point of gap, against thirty-two on Monday. The session was entirely explained by sectors, and that is the difference from the day before.

On the weekly both stay on a buy, but the broad basket is on the edge. SPY's close slipped below its own weekly Inversion Point by twenty-one cents, and what still holds the signal is only the typical price of the week, which sits 0.19% above the level against 0.36% on Monday. SPY is in its twenty-third week with all three profit taking windows reached and a gain of 11.47%. QQQ is in its fifth week, still 3.63% below entry, but with 0.82% of margin on its own level: double that of the broad basket.