* U.S. equity index futures point to opening jump
* U.S. initial jobless claims 293k vs 319k estimate
* U.S. Sep PPI MM YY < estimates; core MM YY < estimates
* Euro STOXX 600 index up ~1%
* Dollar slips; gold, crude, bitcoin rise
* U.S. 10-Year Treasury yield ~1.54%
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NASDAQ COMPOSITE: TAKE A WALK ON THE WILD SIDE (0855
With the fourth quarter of 2021 just underway, the Nasdaq
Composite is on track to do something it has never done
before: its entire trading range so far this year has been above
its upper yearly Bollinger Band (BB):
Bollinger Bands (BB) are envelopes, or trading bands,
plotted at a level of standard deviation above and below a
simple moving average of price. Given that the bands are based
on standard deviation, they adjust to swings in volatility. The
bands can help answer the question of whether price is high or
low on a relative basis.
Using Refinitiv data, the IXIC has ended a year above its
upper yearly BB - or more than two standard deviations above its
20-year moving average - nine times, or about 41% of the time.
This includes a current eight-year streak from 2013 to 2020.
What has been unique about this year, however, is that the
Composite's 12,397.05 low is above is upper yearly BB, which now
resides at 11,918.34.
When looking at the greater histories of the Dow, and
S&P 500, these index's entire yearly ranges have only
been above their upper yearly BB once (~1% of the time), and
twice (~3% of the time), making it a relatively rare event.
The Composite may yet accomplish this feat in 2021, but
given that the bands adjust to volatility, we can calculate the
minimum upside level at which the IXIC would need to end the
year in order to pull the upper yearly band above the current
low. That level is anything above 16,003.
Action on the downside is trickier, given that we can't know
its exact path. For example, a deep decline, followed by a big
upward reversal could solve the issue. One thing we can know
under a downside scenario, however, is that at some point before
year-end, the IXIC would, at a minimum, need to break below the
year's current low at 12,397.053.
Therefore, based on this analysis, in order to not register
the "rare" event, the IXIC must now either end the year at least
10% higher than Wednesday's close, or, at some point, it has to
fall more than 15% from yesterday's finish.
Thus, there appears to be potential for one wild ride
through the rest of 2021.
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)