We were just filled on our 690/700 call spread as the market has exploded to the up side.
We are putting in two working order to close this trade. I have them OCOed
Buy 2 Apr 690/700 call spread GTC limit for $0.05 Debit
Buy 2 Apr 690 calls @ market GTC if RUT trades at or above 690.
I will get the tracker up to date shorlty.
Thursday, February 25, 2010
Rut Spread Adjustment
We our closing our open order to sell the Apr 700/710 call spread and we are going to roll that down and put an order to sell the Apr 690/700 call spread for a GTC limit of $0.50.
Market is making a move back to the upside so if we can get a fill the 690/700 gives us a better chance.
Market is making a move back to the upside so if we can get a fill the 690/700 gives us a better chance.
Today’s Market Guidance
Financial Overview:
With US economic numbers disappointing the trade, the Greece situation remaining unsettled and the Obama Administration setting the stage for yet another assault on Health care reform, there are clearly more bearish influences than bullish influences in the marketplace. With Washington aiming its blame gun at health insurers and Congress moving to repeal a Federal Antitrust exemption for health insurers, it would appear that another industry is about to be ransacked. Typically seeing the US Federal Reserve Chairman promise lingering low rates is seen as a positive and at times the stock market yesterday even seemed to rally off the idea that soft US numbers would insure lingering low rates. In other words, the market tried to shift back into a position where soft numbers serves to temper the fear of higher rate. However, the market doesn't even seem to be able to consistently embrace the soft number/higher equities theme, perhaps because some don't believe the Fed, while others are just afraid of further anti growth measures coming from Washington. Mix in what could be a deteriorating Greece situation and there appears to be more risk than reward in the current market.
DOW:
With a pattern of lower highs in the March Mini Dow this week, it would seem like the bear camp has the technical edge. In fact, the market was unable to benefit from potentially supportive corporate headline news and clearly the scheduled macro economic news this week has been discouraging. Today the markets probably won't have as much support off Fed testimony (because it is the second day of testimony) and that could make the mid day auction results a bit of a negative for equity market sentiment. Critical support in the March Mini Dow looks weak at 10,299, with the market potentially unable to avoid a slide down to and below 10,250.
The cross over and close above the 60-day moving average is an indication the longer-term trend has turned positive. Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 10456. The next area of resistance is around 10424 and 10456, while 1st support hits today at 10314 and below there at 10237.
S&P:
Critical up trend channel support is seen at 1094.80 today, but we have to think that support levels could be violated, given the docket of political and economic events scheduled for today. In fact, to alter the down trend pattern in the S&P would probably require a rally back above 1105.20. If the durable goods report disappoints early today, we suspect that bearish sentiment will dominate.
Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market has a slightly positive tilt with the close over the swing pivot. The next upside objective is 1114.25. The next area of resistance is around 1110.00 and 1114.25, while 1st support hits today at 1097.00 and below there at 1088.25.
NASDAQ:
Like the Mini Dow, the Nasdaq has a pattern of lower highs on the charts and it is likely that the March Nasdaq will see a slide below the even number 1800 level today. With a lower early US trade this morning being seen despite a series of favorable corporate earnings news items from the European markets it is clear that the trade is still looking at the glass as half empty. Critical up trend channel support is seen today at 1797.65, but we can't argue against a return to the February 23rd low of 1785.
US Dollar:
The Dollar Index continues to maintain a bullish tilt on the charts, despite lingering concerns for the pace of the US recovery. However, ongoing concerns toward the Greece situation has provided the Dollar with a bid in the overnight action. While a sloppy or slack US Durable goods report might restrict the upside in the Dollar today and the Dollar might also be undermined as a result of a marathon televised Washington political debacle, the bias looks to remain up in the Greenback. In other words, the economic and political outlook inside the US isn't overly impressive, but apparently the outlook and condition in the Euro zone is even worse. In fact, overnight the Euro zone saw economic sentiment decline for the first time in 11 months and S&P has warned of a possible downgrade of the Greece debt rating. Some sources are suggesting that a downgrade of the Greek credit rating will cancel out the budget slashing efforts that are already causing violent protests. With a Greek official reportedly lashing out against the Germans and also maligning the EU leadership, it is clear that tensions are running pretty hot. Therefore, the Dollar looks to continue to get the benefit of the doubt on its economy, because of a more powerful flight to quality influence. Critical up trend channel support is seen at 80.36 but a closer in support level is also seen at 80.86.
Gold:
The bears will suggest that April gold managed a fresh new low for the move in the overnight trade, while the bulls will suggest that the market managed to generally hold within striking distance of the even number $1,100 level. With residual strength in the Dollar and ongoing concern toward the Greece situation seen overnight, it appears that some favorable demand news from the World Gold Council was partially lost in the shuffle. Nonetheless, the gold market probably saw some support off predictions from the WGC that Chinese and Indian gold demand was starting out 2010 on a strong footing. The positive demand tilt was probably given an added boost by a rather impressive annual jump in expected February Indian gold imports. In fact, the February Indian import figures put forth from the Bombay Bullion Association of 30 to 35 tons, clearly best the 2009 February import tally, which was under 8 tons. Unfortunately physical demand issues haven't been given a primary role in determining gold prices recently, with big picture macro economic views seemingly taking precedence. In the end, strong demand prospects from Indian and China won't be forgotten, but that news might be discounted until the Dollar gets off the back of the gold market or and the global macro economic outlook improves.
Silver:
At first blush, a higher Dollar and lower equities seems to have applied some minor pressure to silver prices. However, the May silver contract did manage to rise back above the prior session's highs at times overnight and that has to embolden some bulls and discourage some bears. While it seems like silver is generally tracking off outside market forces, there are some analysts who are attempting to play up the prospect of developing tightness in the silver market and that might be helping silver to generally outperform the gold market. However, classic fundamental analysts have to be disappointed with the sharp slide in US new home sales readings in the prior trading session. Furthermore, it would also seem like silver will have to continue to deal with the threat of further debt related turmoil in Greece. Some traders are suggesting that regaining the $16.00 level overnight hints at an improvement in sentiment toward silver, while others suggest that more slack US economic readings this morning could put the bear camp right back in control of silver prices.
Crude Oil:
Crude oil has given back a portion of yesterday's gains in the early overnight trade with prices under some pressure from weaker global equity markets and a slightly firmer Dollar tied to lingering concerns over the pace of the global economic recovery. Macro economic optimism for a recovery in oil demand seems to have been undermined overnight after a ratings agencies warned that Greece's debt rating could be downgraded again raising fears that European sovereign debt problems will impede growth in that region while Bernanke weak assessment of the US economy may also have thrown oil markets a bit off balance. While oil markets rallied yesterday on relief the Fed plans to keep rates low for some time, the low rate environment hasn't been able to significantly revive fuel demand so far and this week's data showing a slump in consumer confidence and a sharp drop in new home sales isn't a particularly strong fundamental backdrop for a recovery in fuel demand. The market may also be rethinking yesterday's EIA report given that crude oil stocks shot up 3 million barrels despite a higher refinery operating rate and despite the drop in gasoline stocks, fuel supplies still remain high. We suspect the relatively unfavorable supply/demand setup is making it difficult for April crude oil to hold rally attempts above the $80 price level. The market may also be getting a bit jittery over the CFTC starting to become stricter in enforcing position limits in oil markets with news yesterday the regulatory agency had fined a brokerage firm for exceeding position limits in energy markets. Oil markets could be negatively impacted if funds start to feel more pressure from the CFTC. The rally in April crude oil from the February low has now lifted daily technical indicators to overbought levels and there seems to be strong overhead resistance around the $80.30 price level. We suspect today's economic reports on jobless claims and durable goods will set the market tone and crude oil looks to be sufficiently overbought that bearish indicators may be enough to pressure the market back towards support in the $78.52 to $78.20 price range. On the other hand, the rally in oil has been mostly based on a revival in macro economic optimism improving sentiment for a recovery in oil demand. While the oil markets are starting out weaker, they have also shown impressive resiliency and if today's economic news is bullish or equities start to recover, it also won't be surprising to see April crude oil retest this week's highs. While April crude oil looks technically vulnerable up near $80, we also don't see a lot of downside potential unless equity markets break sharply or the Dollar shoots higher. But with the big debate over healthcare reform on Capital Hill today, equity market jitters will certainly spill over into energy markets today.
Natural Gas:
Natural gas has edged lower in the early overnight trade as the market can't seem to find any follow through on rally attempts which is certainly a characteristic of a bear market. Natural gas bounced yesterday partly finding support from a sharp rally in crude oil, gains in equities and a weaker Dollar, but strong outside market support is lacking this morning. It also seemed as if some traders wanted to book profits following a 74 cent break from last week's high ahead of today's inventory report which is expected to show a larger than average draw from storage. With April natural gas becoming a bit short-term oversold on the last leg down, it won't be surprising to see more of a technical bounce if today's storage report shows natural gas supplies declining by over 169 bcf expected by most traders since the drop would be significantly more than the 90 bcf draw seen last year and the 5 year average decline of 132 bcf. Another snowstorm headed for the Northeast may also provide some temporary price support to natural gas. But rally attempts in natural gas should continue to be seen as selling opportunities since the supply/demand outlook is turning bearish for this spring and we suspect April natural gas could eventually break below the December low. Bernanke's weak assessment of the US economy and the economic news this week suggests a recovery in industrial fuel demand is likely to be anemic leaving the market at risk to see fuel supplies build since natural gas producers appear to be raising output. Today's reports on durable goods and jobless claims will provide more economic insight, but price gains off the economic or inventory news should be seen as a selling opportunity. The market's trend is down and it's a bearish indication to see open interest in natural gas rise on the price break over the past two weeks suggesting traders are adding to short positions, which was evident in the last COT report. Since the last COT report with options for natural gas also showed small traders were net long 34,578 contracts, it seems as if this market will still have ample selling capacity if support levels fail to hold.
With US economic numbers disappointing the trade, the Greece situation remaining unsettled and the Obama Administration setting the stage for yet another assault on Health care reform, there are clearly more bearish influences than bullish influences in the marketplace. With Washington aiming its blame gun at health insurers and Congress moving to repeal a Federal Antitrust exemption for health insurers, it would appear that another industry is about to be ransacked. Typically seeing the US Federal Reserve Chairman promise lingering low rates is seen as a positive and at times the stock market yesterday even seemed to rally off the idea that soft US numbers would insure lingering low rates. In other words, the market tried to shift back into a position where soft numbers serves to temper the fear of higher rate. However, the market doesn't even seem to be able to consistently embrace the soft number/higher equities theme, perhaps because some don't believe the Fed, while others are just afraid of further anti growth measures coming from Washington. Mix in what could be a deteriorating Greece situation and there appears to be more risk than reward in the current market.
DOW:
With a pattern of lower highs in the March Mini Dow this week, it would seem like the bear camp has the technical edge. In fact, the market was unable to benefit from potentially supportive corporate headline news and clearly the scheduled macro economic news this week has been discouraging. Today the markets probably won't have as much support off Fed testimony (because it is the second day of testimony) and that could make the mid day auction results a bit of a negative for equity market sentiment. Critical support in the March Mini Dow looks weak at 10,299, with the market potentially unable to avoid a slide down to and below 10,250.
The cross over and close above the 60-day moving average is an indication the longer-term trend has turned positive. Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 10456. The next area of resistance is around 10424 and 10456, while 1st support hits today at 10314 and below there at 10237.
S&P:
Critical up trend channel support is seen at 1094.80 today, but we have to think that support levels could be violated, given the docket of political and economic events scheduled for today. In fact, to alter the down trend pattern in the S&P would probably require a rally back above 1105.20. If the durable goods report disappoints early today, we suspect that bearish sentiment will dominate.
Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market has a slightly positive tilt with the close over the swing pivot. The next upside objective is 1114.25. The next area of resistance is around 1110.00 and 1114.25, while 1st support hits today at 1097.00 and below there at 1088.25.
NASDAQ:
Like the Mini Dow, the Nasdaq has a pattern of lower highs on the charts and it is likely that the March Nasdaq will see a slide below the even number 1800 level today. With a lower early US trade this morning being seen despite a series of favorable corporate earnings news items from the European markets it is clear that the trade is still looking at the glass as half empty. Critical up trend channel support is seen today at 1797.65, but we can't argue against a return to the February 23rd low of 1785.
US Dollar:
The Dollar Index continues to maintain a bullish tilt on the charts, despite lingering concerns for the pace of the US recovery. However, ongoing concerns toward the Greece situation has provided the Dollar with a bid in the overnight action. While a sloppy or slack US Durable goods report might restrict the upside in the Dollar today and the Dollar might also be undermined as a result of a marathon televised Washington political debacle, the bias looks to remain up in the Greenback. In other words, the economic and political outlook inside the US isn't overly impressive, but apparently the outlook and condition in the Euro zone is even worse. In fact, overnight the Euro zone saw economic sentiment decline for the first time in 11 months and S&P has warned of a possible downgrade of the Greece debt rating. Some sources are suggesting that a downgrade of the Greek credit rating will cancel out the budget slashing efforts that are already causing violent protests. With a Greek official reportedly lashing out against the Germans and also maligning the EU leadership, it is clear that tensions are running pretty hot. Therefore, the Dollar looks to continue to get the benefit of the doubt on its economy, because of a more powerful flight to quality influence. Critical up trend channel support is seen at 80.36 but a closer in support level is also seen at 80.86.
Gold:
The bears will suggest that April gold managed a fresh new low for the move in the overnight trade, while the bulls will suggest that the market managed to generally hold within striking distance of the even number $1,100 level. With residual strength in the Dollar and ongoing concern toward the Greece situation seen overnight, it appears that some favorable demand news from the World Gold Council was partially lost in the shuffle. Nonetheless, the gold market probably saw some support off predictions from the WGC that Chinese and Indian gold demand was starting out 2010 on a strong footing. The positive demand tilt was probably given an added boost by a rather impressive annual jump in expected February Indian gold imports. In fact, the February Indian import figures put forth from the Bombay Bullion Association of 30 to 35 tons, clearly best the 2009 February import tally, which was under 8 tons. Unfortunately physical demand issues haven't been given a primary role in determining gold prices recently, with big picture macro economic views seemingly taking precedence. In the end, strong demand prospects from Indian and China won't be forgotten, but that news might be discounted until the Dollar gets off the back of the gold market or and the global macro economic outlook improves.
Silver:
At first blush, a higher Dollar and lower equities seems to have applied some minor pressure to silver prices. However, the May silver contract did manage to rise back above the prior session's highs at times overnight and that has to embolden some bulls and discourage some bears. While it seems like silver is generally tracking off outside market forces, there are some analysts who are attempting to play up the prospect of developing tightness in the silver market and that might be helping silver to generally outperform the gold market. However, classic fundamental analysts have to be disappointed with the sharp slide in US new home sales readings in the prior trading session. Furthermore, it would also seem like silver will have to continue to deal with the threat of further debt related turmoil in Greece. Some traders are suggesting that regaining the $16.00 level overnight hints at an improvement in sentiment toward silver, while others suggest that more slack US economic readings this morning could put the bear camp right back in control of silver prices.
Crude Oil:
Crude oil has given back a portion of yesterday's gains in the early overnight trade with prices under some pressure from weaker global equity markets and a slightly firmer Dollar tied to lingering concerns over the pace of the global economic recovery. Macro economic optimism for a recovery in oil demand seems to have been undermined overnight after a ratings agencies warned that Greece's debt rating could be downgraded again raising fears that European sovereign debt problems will impede growth in that region while Bernanke weak assessment of the US economy may also have thrown oil markets a bit off balance. While oil markets rallied yesterday on relief the Fed plans to keep rates low for some time, the low rate environment hasn't been able to significantly revive fuel demand so far and this week's data showing a slump in consumer confidence and a sharp drop in new home sales isn't a particularly strong fundamental backdrop for a recovery in fuel demand. The market may also be rethinking yesterday's EIA report given that crude oil stocks shot up 3 million barrels despite a higher refinery operating rate and despite the drop in gasoline stocks, fuel supplies still remain high. We suspect the relatively unfavorable supply/demand setup is making it difficult for April crude oil to hold rally attempts above the $80 price level. The market may also be getting a bit jittery over the CFTC starting to become stricter in enforcing position limits in oil markets with news yesterday the regulatory agency had fined a brokerage firm for exceeding position limits in energy markets. Oil markets could be negatively impacted if funds start to feel more pressure from the CFTC. The rally in April crude oil from the February low has now lifted daily technical indicators to overbought levels and there seems to be strong overhead resistance around the $80.30 price level. We suspect today's economic reports on jobless claims and durable goods will set the market tone and crude oil looks to be sufficiently overbought that bearish indicators may be enough to pressure the market back towards support in the $78.52 to $78.20 price range. On the other hand, the rally in oil has been mostly based on a revival in macro economic optimism improving sentiment for a recovery in oil demand. While the oil markets are starting out weaker, they have also shown impressive resiliency and if today's economic news is bullish or equities start to recover, it also won't be surprising to see April crude oil retest this week's highs. While April crude oil looks technically vulnerable up near $80, we also don't see a lot of downside potential unless equity markets break sharply or the Dollar shoots higher. But with the big debate over healthcare reform on Capital Hill today, equity market jitters will certainly spill over into energy markets today.
Natural Gas:
Natural gas has edged lower in the early overnight trade as the market can't seem to find any follow through on rally attempts which is certainly a characteristic of a bear market. Natural gas bounced yesterday partly finding support from a sharp rally in crude oil, gains in equities and a weaker Dollar, but strong outside market support is lacking this morning. It also seemed as if some traders wanted to book profits following a 74 cent break from last week's high ahead of today's inventory report which is expected to show a larger than average draw from storage. With April natural gas becoming a bit short-term oversold on the last leg down, it won't be surprising to see more of a technical bounce if today's storage report shows natural gas supplies declining by over 169 bcf expected by most traders since the drop would be significantly more than the 90 bcf draw seen last year and the 5 year average decline of 132 bcf. Another snowstorm headed for the Northeast may also provide some temporary price support to natural gas. But rally attempts in natural gas should continue to be seen as selling opportunities since the supply/demand outlook is turning bearish for this spring and we suspect April natural gas could eventually break below the December low. Bernanke's weak assessment of the US economy and the economic news this week suggests a recovery in industrial fuel demand is likely to be anemic leaving the market at risk to see fuel supplies build since natural gas producers appear to be raising output. Today's reports on durable goods and jobless claims will provide more economic insight, but price gains off the economic or inventory news should be seen as a selling opportunity. The market's trend is down and it's a bearish indication to see open interest in natural gas rise on the price break over the past two weeks suggesting traders are adding to short positions, which was evident in the last COT report. Since the last COT report with options for natural gas also showed small traders were net long 34,578 contracts, it seems as if this market will still have ample selling capacity if support levels fail to hold.
Swing Futures Triggered & Guidance.
Short 1 ZB @ 116-30
Here is the guidance,
Bonds:
The Treasury market had the benefit of Bernanke comments in the prior trading session, as slack auction results could have sunk prices, but apparently the promise of holding US rates down ruled the trade. With Bernanke pointing to a stubborn job market and low inflation as justification for the Fed's on-hold strategy, the market was able to reach up to the highest level since February 10th. Treasury prices have remained just below the prior session's highs through the overnight action, with residual Greece concerns and marginally lower global equity prices providing the bulls with the edge. With a Greek official lashing out against the German people and questioning the intelligence of EU leadership, one gets the impression that the negotiations between the two entities is on the rocks again. With protests continuing in Greece, a major ratings agency has suggested that a downgrade could be forth coming. Therefore, Treasuries are poised to get some residual flight to quality support, which comes on top of a very disappointing US new home sales report on Wednesday morning. In short, the outlook for the US recovery is suspect again and support from flight to quality angles is expected to continue to surface. However, the market will be presented with the last round of Treasury auctions later today, with $32 billion in 7 Year notes to be floated and that could take away some of the early gains in prices. Ultimately, we suspect that ongoing concern for the slow pace of the recovery is capable of offsetting what is expected to be slack demand for the longest maturity in the current auction cycle. With residual slowing fears seen from international economic readings, ongoing Chinese tightening fears and the recent flow of slack US numbers, it is possible that the fear of supply will simply be glossed over today. In fact, the Durable Goods report might be discounted this morning, especially if the report shows an as expected modest gain of only +1% to +1.5%. In other words, it will take a definitively stronger than expected US Durable Goods report or something favorable from the claims data just to alter the upward tilt in Treasury prices. We suspect that Bernanke testimony today will carry less weight because his views were presented in the prior trading session. However, one should not expect to see aggressive gains in US Treasuries unless that action is prompted by a severe breakdown in the Greece situation or by a very hard slide in US equities. In the end, one has to concede to a slow grinding rise in Treasury prices in the early action today, with the gains tempered into and through the mid day auction results. Given the economic setup today, June bonds might see little in the way of resistance until the 117-00 level, with similar resistance in June Notes not seen until 117-10. For the time being, close-in support looks to present itself at 116-20 in June bonds and at 116-27 in June Notes. In general, expect slow grinding gains on the charts ahead.
Here is the guidance,
Bonds:
The Treasury market had the benefit of Bernanke comments in the prior trading session, as slack auction results could have sunk prices, but apparently the promise of holding US rates down ruled the trade. With Bernanke pointing to a stubborn job market and low inflation as justification for the Fed's on-hold strategy, the market was able to reach up to the highest level since February 10th. Treasury prices have remained just below the prior session's highs through the overnight action, with residual Greece concerns and marginally lower global equity prices providing the bulls with the edge. With a Greek official lashing out against the German people and questioning the intelligence of EU leadership, one gets the impression that the negotiations between the two entities is on the rocks again. With protests continuing in Greece, a major ratings agency has suggested that a downgrade could be forth coming. Therefore, Treasuries are poised to get some residual flight to quality support, which comes on top of a very disappointing US new home sales report on Wednesday morning. In short, the outlook for the US recovery is suspect again and support from flight to quality angles is expected to continue to surface. However, the market will be presented with the last round of Treasury auctions later today, with $32 billion in 7 Year notes to be floated and that could take away some of the early gains in prices. Ultimately, we suspect that ongoing concern for the slow pace of the recovery is capable of offsetting what is expected to be slack demand for the longest maturity in the current auction cycle. With residual slowing fears seen from international economic readings, ongoing Chinese tightening fears and the recent flow of slack US numbers, it is possible that the fear of supply will simply be glossed over today. In fact, the Durable Goods report might be discounted this morning, especially if the report shows an as expected modest gain of only +1% to +1.5%. In other words, it will take a definitively stronger than expected US Durable Goods report or something favorable from the claims data just to alter the upward tilt in Treasury prices. We suspect that Bernanke testimony today will carry less weight because his views were presented in the prior trading session. However, one should not expect to see aggressive gains in US Treasuries unless that action is prompted by a severe breakdown in the Greece situation or by a very hard slide in US equities. In the end, one has to concede to a slow grinding rise in Treasury prices in the early action today, with the gains tempered into and through the mid day auction results. Given the economic setup today, June bonds might see little in the way of resistance until the 117-00 level, with similar resistance in June Notes not seen until 117-10. For the time being, close-in support looks to present itself at 116-20 in June bonds and at 116-27 in June Notes. In general, expect slow grinding gains on the charts ahead.
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