2 Apr 570/560 put spread filled @ 0.50
Put in these working orders to close this spread
Buy to close 2 Apr 570/560 put spreads @ limt GTC $0.05
Buy to close 2 Apr 570 puts @ market GTC if RUT trades at or below 570
Triggers
Sell to close 2 Apr 560 puts @ market GTC if RUT trades at or below 560
Thursday, March 4, 2010
RUT Spread Update
The market has moved higher this morning. So we will roll up our working put spread order to see if we can get a fill.
Replace our 550/540 puts spread with 570/560
So sell to open 2 Apr 570/560 puts spreads @ limit $0.50 GTC
Replace our 550/540 puts spread with 570/560
So sell to open 2 Apr 570/560 puts spreads @ limit $0.50 GTC
Today's Market Guidance
Financial Overview:
World stock markets showed some weakness overnight and that weakness might have come from any number of minor bearish themes. First of all, it is possible that the markets were simply banking some profits and were in need of technical balancing. It is also possible that news of a quake in the Asian region, sparked some weakness, or it is possible that fresh restrictions on borrowing in China provided a slight financial tremor. In looking at the developments from Greece overnight, it would seem as if that situation was mostly under control and therefore not the source of the sideways to lower overnight price action. One could also suggest that a very minimal rise in Euro zone GDP and or a decline in UK Halifax house price report were discouraging and possibly a source of minor selling in stocks. Our gut suggests that the initial weakness today, is the result of the Chinese tightening and the need to technically balance stock prices. In looking forward, we are slightly positive as the scheduled numbers today look to be indicative of ongoing growth and since the US Fed Beige Book yesterday afternoon also conceded to growth across most US Federal Reserve districts, the overall macro economic view should remain positive. However, it would seem like the US Administration is once again poised to push for the Volcker rule and that should be considered a limiting development.
DOW:
The March Mini Dow showed some patently bearish technical action overnight as it managed to take out the prior two session's lows. However, up trend channel support in the March Mini Dow is seen at 10,308 and that up trend channel support line rises to 10,335 on Friday. The market seems to be partially undermined, as a result of the renewed push for the Volcker exclusion and that might mean the US scheduled data will have to be distinctly positive this morning in order to rekindle speculative buying interest in the market, especially ahead of the ultra critical monthly payroll report on Friday morning. Be a buyer of up trend channel support, but don't tolerate a slide below 10,269.
Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. The daily closing price reversal down puts the market on the defensive. The market's close below the pivot swing number is a mildly negative setup. The near-term upside target is at 10495. The next area of resistance is around 10438 and 10495, while 1st support hits today at 10344 and below there at 10307.
S&P:
Unfortunately for the bull camp, up trend channel support is seen all the way down at 1100.30, with a closer-in support level seen at 1112.80. We see a critical pivot point this morning into the scheduled US data, as the market has already managed a slight technical correction and the failure to bounce off decent US numbers and the initial results from the Greek auction would suggest that the bull camp is losing its desire. In short, be a buyer into the scheduled data, but don't tolerate a return below the early low of 1113.50.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 1129.50. The next area of resistance is around 1124.00 and 1129.50, while 1st support hits today at 1114.00 and below there at 1109.50.
NASDAQ:
The March Nasdaq comes into the action this morning waffling around both sides of the 1850 level. Critical support is seen down at 1842.75 today and a failure of that level could promote noted stop loss selling pressure. Apparently some players are fearful of the monthly US payroll report on Friday morning and that should make today's rather active flow of scheduled data rather important. In fact, unless the Greek debt sours from an initial favorable standing we suspect that liquidation pressure might be limited and easily reversed by US scheduled data flows.
Bonds:
Apparently Treasury prices were lifted late Wednesday in the face of some initial weakness in global equity prices, but it is possible that prices might have been lifted by early reports of yet another earthquake ( centered in Taiwan). Clearly Treasuries were lifted in the wake of the Fed Beige book yesterday perhaps because the Fed merely acknowledged the impact of severe February weather on the numbers and that theme has been offered up as an impact on the Friday numbers. However, the Fed Beige Book also noted growth across most Fed sections even though they made note of the weather impact. With the additional commentary that 'layoffs slowed' and that hiring plans were anemic, that probably signaled to the market that the US jobs sector remains weak and with the key monthly reading just ahead, that prompted the Treasury market to recover and perhaps to see some fresh outright buying for a speculative play on the Friday payroll reports. We also think that renewed talk about the 'Volcker Rule' rekindles some concern that Treasuries might once again be one of the few investments available to Banks. It also seems as if the Greece situation is mostly under control overnight, as that country launched a debt offering today and the results early on seemed to be mostly OK and that could serve to drain some flight to quality buying interest from the Treasury market. In looking ahead to the scheduled data flow today, the markets will see a very active flow of data, with the weekly claims data, Pending Home sales and Factory orders. There is also a US Productivity reading to be released today and we suspect that will be supportive to Treasuries, as the job market remains soft enough, that employers are continuing to squeeze out production from an aggressively trimmed work force. However, until there is a higher degree of uncertainty on the hike/no hike question, the Productivity reading shouldn't be seen as an overly important reading. In the other reports, the trade seems to be expecting a modest gain in Factory Orders and also in Pending Home sales and that could be limiting for Treasury prices, but only if the claims data, released ahead of the second set of data, manages to show some declines. In conclusion, we think that the claims data will be the most important data of the day, with the Pending Home sales report, the report that might be capable of providing the biggest surprise. Therefore, we think that the upside will remain limited by the data today, with the June bonds potentially finding it difficult to rise above 117-17 and Notes above the 117-18 level. In fact, if the claims data shows the type of declines predicted by some economists, the Treasury market could see a mostly bearish track throughout the morning trading session. We suspect that ranges might be narrowed later today due to the US Non Farm payroll report on Friday morning, unless of course the stock market takes out the Tuesday lows off some fresh disconcerting development.
US Dollar:
The Dollar appears to be holding just above the prior lows as if it is waiting for the final judgment on the Greek 10 Year debt offering. At least from the early indications, the debt offering went off fairly well and when one combines that sentiment, with the potential for decent US economic news, that could leave the bear camp with the near term edge in the Dollar. However, the Dollar might not fall aggressively because of the presence of the ultra critical US Non Farm payroll report on Friday morning. It is also possible that the Dollar is set to get some minor support from the latest Chinese tightening effort, but that support will probably be totally washed away because of another push in the US for the Volcker rule. In our opinion, pushing for the Volcker Rule should mean that some money will decide to flee the US Dollar. In conclusion, the bearish items seem to easily out number the bullish items, with favorable US data likely to continue lifting oversold Non Dollar currencies. Critical support in the March Dollar index is seen at 79.97 but a decline down to 79.75 would not be surprising today.
Gold:
After another new high for the move in April gold and the highest price since January 15th, the bull camp can claim they have the trend in their court. However, the bear camp holds out hope that the Friday morning payroll reading will highlight a very slack US economy. However, negative Greek developments recently have been undermining to gold prices and the overnight news seems to moderate anxiety somewhat toward the Greek affair and that could support gold prices. While the gold market hasn't given classic supply side developments much credence lately, news that Russian January gold production was lower than some previously released gold production readings, might be seen as a supportive story. Some gold bulls have suggested that evidence of slack gold production might be given more credence in the event that the global economic outlook improves further and therefore supply side stories could take on more importance. News that Indian buyers have generally remained disinterested this week, in the face of rising prices, hasn't been given that much attention by the trade and some players suggest that signals a gold market that is in favor off a number of different themes. With the April gold market to the high yesterday, sitting as much as $100 an ounce above the early February lows and the markets facing a very heavy flow of data over the coming 36 hours of trade, one should expect an increase in gold price volatility directly ahead.
Silver:
The silver market has managed another new high for the move in the early going today and in the process the May silver contract managed to reach the highest price level since January 22nd. The outside metals market action is mixed in the early going today, with platinum minimally higher, while copper and gold prices were initially weaker and that could leave the bull case in silver somewhat limited. However, silver and gold have seemingly benefited this week from a generally weaker Dollar and what seems to be a modest improvement in overall macro economic views. It would also appear that May silver prices this morning have waffled around both sides of the prior session's closing level of $17.32 and that could make that level a key pivot point in the action today. In the end, silver and other physical commodity markets probably need positive US scheduled data flows to hold recent gains, especially since the trade is generally expecting favorable numbers. Some traders noted a rather large build in daily silver exchange stocks overnight and news of an increase in silver reserves at a silver mining company, but recently physical supply side news hasn't been given that much play.
Crude Oil:
Crude oil has seen a softer trade in the early overnight action, but so far the selling interest seems to lack conviction. In fact, the market is starting to gain some upside traction after bouncing from overnight lows. Earlier weakness in oil was likely tied to a stronger Dollar and the weak equity market action overnight which likely inspired some profit taking in oil after yesterday's strong price run up. Lingering concerns over Greece's debt problem even after new austerity measures were adopted this week may also be weighing on the oil markets. Early weakness in oil may have been due to a report showing China's bank lending fell significantly in February as monetary tightening started to take effect and a report that China's refineries will trim crude runs by 5.6% this month for maintenance. Oil markets could also be feeling a bit jittery over the US government's push toward financial market reform since the latest version includes limiting bank's proprietary trading. But overall oil market's appears to have regained a more positive view towards oil demand and as long as that sentiment holds, an upward price bias is likely to remain in place. The Fed in their Beige Book report said they saw a modest recovery taking hold and yesterday's better than expected reading on service sector growth certainly seemed to improve the macro economic view. In fact seeing oil markets shrug off the 4 million barrel jump in crude oil stocks and a rise in gasoline supplies to instead focus on the 3% gain in total product demand suggest a bullish mindset has taken hold. But with April crude oil continuing to show signs of struggling up at these high price levels, it's likely the market will need to see positive readings from today's economic reports on jobless claims, factory orders, productivity and pending home sales to make another push higher and avoid extensive profit taking ahead of Friday's key employment data. While high fuel supplies remain a stumbling block for the bull camp, the market will likely be able to overcome this obstacle if a better macro economic view is embraced since that will improve the demand outlook for oil. Although April crude oil seems to be a bit short-term overbought, seeing the market set higher highs and higher lows over the last five sessions indicates a clear upward bias and that also suggests price dips back to support levels should be buying opportunities. We suspect the sideways trade in oil is helping the market correct its overbought condition and that an eventual test of the January high will be made.
Natural Gas:
Natural gas has seen a two sided trade overnight, but with daily indicators falling to oversold extremes, the market may soon have some potential to trade higher on technical short covering. Today's storage report could support a higher trade in natural gas, especially if fuel supplies fall more than the 130 bcf expected by most traders which would be larger than the 101 bcf decline see last year and more than the 5 year average draw of 124 bcf. The widening price spread between crude oil and natural gas in Btu terms may also start to attract some bargain hunting buying in natural gas that my provide some near-term price support. But a return of industrial fuel demand will be critical in forming a low in natural gas and the market was certainly supported by yesterday's reports showing stronger than expected growth in the service sector and a smaller than expected job loss in the private sector last month. An EIA report released this week showed industrial consumption of natural gas was up 7.4% in December compared to a year ago with power utility demand growing by 9%. Today's reports on jobless claims, factory orders and housing will provide more economic insight and seeing stronger than expected numbers could motivate more short covering in natural gas if the data can improve the macro economic outlook. But with the Fed in their latest Beige Book report only seeing modest improvements in the economy, the slow pace of the economic recovery being seen suggests a technical bounce in April natural gas may be limited to the $5.00 price level while the strong potential for fuel supplies to see a sharp build up during the injection season will ultimately keep downside price risk in place. Therefore, an eventual price break to $4.15 can't be ruled out.
World stock markets showed some weakness overnight and that weakness might have come from any number of minor bearish themes. First of all, it is possible that the markets were simply banking some profits and were in need of technical balancing. It is also possible that news of a quake in the Asian region, sparked some weakness, or it is possible that fresh restrictions on borrowing in China provided a slight financial tremor. In looking at the developments from Greece overnight, it would seem as if that situation was mostly under control and therefore not the source of the sideways to lower overnight price action. One could also suggest that a very minimal rise in Euro zone GDP and or a decline in UK Halifax house price report were discouraging and possibly a source of minor selling in stocks. Our gut suggests that the initial weakness today, is the result of the Chinese tightening and the need to technically balance stock prices. In looking forward, we are slightly positive as the scheduled numbers today look to be indicative of ongoing growth and since the US Fed Beige Book yesterday afternoon also conceded to growth across most US Federal Reserve districts, the overall macro economic view should remain positive. However, it would seem like the US Administration is once again poised to push for the Volcker rule and that should be considered a limiting development.
DOW:
The March Mini Dow showed some patently bearish technical action overnight as it managed to take out the prior two session's lows. However, up trend channel support in the March Mini Dow is seen at 10,308 and that up trend channel support line rises to 10,335 on Friday. The market seems to be partially undermined, as a result of the renewed push for the Volcker exclusion and that might mean the US scheduled data will have to be distinctly positive this morning in order to rekindle speculative buying interest in the market, especially ahead of the ultra critical monthly payroll report on Friday morning. Be a buyer of up trend channel support, but don't tolerate a slide below 10,269.
Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. The daily closing price reversal down puts the market on the defensive. The market's close below the pivot swing number is a mildly negative setup. The near-term upside target is at 10495. The next area of resistance is around 10438 and 10495, while 1st support hits today at 10344 and below there at 10307.
S&P:
Unfortunately for the bull camp, up trend channel support is seen all the way down at 1100.30, with a closer-in support level seen at 1112.80. We see a critical pivot point this morning into the scheduled US data, as the market has already managed a slight technical correction and the failure to bounce off decent US numbers and the initial results from the Greek auction would suggest that the bull camp is losing its desire. In short, be a buyer into the scheduled data, but don't tolerate a return below the early low of 1113.50.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 1129.50. The next area of resistance is around 1124.00 and 1129.50, while 1st support hits today at 1114.00 and below there at 1109.50.
NASDAQ:
The March Nasdaq comes into the action this morning waffling around both sides of the 1850 level. Critical support is seen down at 1842.75 today and a failure of that level could promote noted stop loss selling pressure. Apparently some players are fearful of the monthly US payroll report on Friday morning and that should make today's rather active flow of scheduled data rather important. In fact, unless the Greek debt sours from an initial favorable standing we suspect that liquidation pressure might be limited and easily reversed by US scheduled data flows.
Bonds:
Apparently Treasury prices were lifted late Wednesday in the face of some initial weakness in global equity prices, but it is possible that prices might have been lifted by early reports of yet another earthquake ( centered in Taiwan). Clearly Treasuries were lifted in the wake of the Fed Beige book yesterday perhaps because the Fed merely acknowledged the impact of severe February weather on the numbers and that theme has been offered up as an impact on the Friday numbers. However, the Fed Beige Book also noted growth across most Fed sections even though they made note of the weather impact. With the additional commentary that 'layoffs slowed' and that hiring plans were anemic, that probably signaled to the market that the US jobs sector remains weak and with the key monthly reading just ahead, that prompted the Treasury market to recover and perhaps to see some fresh outright buying for a speculative play on the Friday payroll reports. We also think that renewed talk about the 'Volcker Rule' rekindles some concern that Treasuries might once again be one of the few investments available to Banks. It also seems as if the Greece situation is mostly under control overnight, as that country launched a debt offering today and the results early on seemed to be mostly OK and that could serve to drain some flight to quality buying interest from the Treasury market. In looking ahead to the scheduled data flow today, the markets will see a very active flow of data, with the weekly claims data, Pending Home sales and Factory orders. There is also a US Productivity reading to be released today and we suspect that will be supportive to Treasuries, as the job market remains soft enough, that employers are continuing to squeeze out production from an aggressively trimmed work force. However, until there is a higher degree of uncertainty on the hike/no hike question, the Productivity reading shouldn't be seen as an overly important reading. In the other reports, the trade seems to be expecting a modest gain in Factory Orders and also in Pending Home sales and that could be limiting for Treasury prices, but only if the claims data, released ahead of the second set of data, manages to show some declines. In conclusion, we think that the claims data will be the most important data of the day, with the Pending Home sales report, the report that might be capable of providing the biggest surprise. Therefore, we think that the upside will remain limited by the data today, with the June bonds potentially finding it difficult to rise above 117-17 and Notes above the 117-18 level. In fact, if the claims data shows the type of declines predicted by some economists, the Treasury market could see a mostly bearish track throughout the morning trading session. We suspect that ranges might be narrowed later today due to the US Non Farm payroll report on Friday morning, unless of course the stock market takes out the Tuesday lows off some fresh disconcerting development.
US Dollar:
The Dollar appears to be holding just above the prior lows as if it is waiting for the final judgment on the Greek 10 Year debt offering. At least from the early indications, the debt offering went off fairly well and when one combines that sentiment, with the potential for decent US economic news, that could leave the bear camp with the near term edge in the Dollar. However, the Dollar might not fall aggressively because of the presence of the ultra critical US Non Farm payroll report on Friday morning. It is also possible that the Dollar is set to get some minor support from the latest Chinese tightening effort, but that support will probably be totally washed away because of another push in the US for the Volcker rule. In our opinion, pushing for the Volcker Rule should mean that some money will decide to flee the US Dollar. In conclusion, the bearish items seem to easily out number the bullish items, with favorable US data likely to continue lifting oversold Non Dollar currencies. Critical support in the March Dollar index is seen at 79.97 but a decline down to 79.75 would not be surprising today.
Gold:
After another new high for the move in April gold and the highest price since January 15th, the bull camp can claim they have the trend in their court. However, the bear camp holds out hope that the Friday morning payroll reading will highlight a very slack US economy. However, negative Greek developments recently have been undermining to gold prices and the overnight news seems to moderate anxiety somewhat toward the Greek affair and that could support gold prices. While the gold market hasn't given classic supply side developments much credence lately, news that Russian January gold production was lower than some previously released gold production readings, might be seen as a supportive story. Some gold bulls have suggested that evidence of slack gold production might be given more credence in the event that the global economic outlook improves further and therefore supply side stories could take on more importance. News that Indian buyers have generally remained disinterested this week, in the face of rising prices, hasn't been given that much attention by the trade and some players suggest that signals a gold market that is in favor off a number of different themes. With the April gold market to the high yesterday, sitting as much as $100 an ounce above the early February lows and the markets facing a very heavy flow of data over the coming 36 hours of trade, one should expect an increase in gold price volatility directly ahead.
Silver:
The silver market has managed another new high for the move in the early going today and in the process the May silver contract managed to reach the highest price level since January 22nd. The outside metals market action is mixed in the early going today, with platinum minimally higher, while copper and gold prices were initially weaker and that could leave the bull case in silver somewhat limited. However, silver and gold have seemingly benefited this week from a generally weaker Dollar and what seems to be a modest improvement in overall macro economic views. It would also appear that May silver prices this morning have waffled around both sides of the prior session's closing level of $17.32 and that could make that level a key pivot point in the action today. In the end, silver and other physical commodity markets probably need positive US scheduled data flows to hold recent gains, especially since the trade is generally expecting favorable numbers. Some traders noted a rather large build in daily silver exchange stocks overnight and news of an increase in silver reserves at a silver mining company, but recently physical supply side news hasn't been given that much play.
Crude Oil:
Crude oil has seen a softer trade in the early overnight action, but so far the selling interest seems to lack conviction. In fact, the market is starting to gain some upside traction after bouncing from overnight lows. Earlier weakness in oil was likely tied to a stronger Dollar and the weak equity market action overnight which likely inspired some profit taking in oil after yesterday's strong price run up. Lingering concerns over Greece's debt problem even after new austerity measures were adopted this week may also be weighing on the oil markets. Early weakness in oil may have been due to a report showing China's bank lending fell significantly in February as monetary tightening started to take effect and a report that China's refineries will trim crude runs by 5.6% this month for maintenance. Oil markets could also be feeling a bit jittery over the US government's push toward financial market reform since the latest version includes limiting bank's proprietary trading. But overall oil market's appears to have regained a more positive view towards oil demand and as long as that sentiment holds, an upward price bias is likely to remain in place. The Fed in their Beige Book report said they saw a modest recovery taking hold and yesterday's better than expected reading on service sector growth certainly seemed to improve the macro economic view. In fact seeing oil markets shrug off the 4 million barrel jump in crude oil stocks and a rise in gasoline supplies to instead focus on the 3% gain in total product demand suggest a bullish mindset has taken hold. But with April crude oil continuing to show signs of struggling up at these high price levels, it's likely the market will need to see positive readings from today's economic reports on jobless claims, factory orders, productivity and pending home sales to make another push higher and avoid extensive profit taking ahead of Friday's key employment data. While high fuel supplies remain a stumbling block for the bull camp, the market will likely be able to overcome this obstacle if a better macro economic view is embraced since that will improve the demand outlook for oil. Although April crude oil seems to be a bit short-term overbought, seeing the market set higher highs and higher lows over the last five sessions indicates a clear upward bias and that also suggests price dips back to support levels should be buying opportunities. We suspect the sideways trade in oil is helping the market correct its overbought condition and that an eventual test of the January high will be made.
Natural Gas:
Natural gas has seen a two sided trade overnight, but with daily indicators falling to oversold extremes, the market may soon have some potential to trade higher on technical short covering. Today's storage report could support a higher trade in natural gas, especially if fuel supplies fall more than the 130 bcf expected by most traders which would be larger than the 101 bcf decline see last year and more than the 5 year average draw of 124 bcf. The widening price spread between crude oil and natural gas in Btu terms may also start to attract some bargain hunting buying in natural gas that my provide some near-term price support. But a return of industrial fuel demand will be critical in forming a low in natural gas and the market was certainly supported by yesterday's reports showing stronger than expected growth in the service sector and a smaller than expected job loss in the private sector last month. An EIA report released this week showed industrial consumption of natural gas was up 7.4% in December compared to a year ago with power utility demand growing by 9%. Today's reports on jobless claims, factory orders and housing will provide more economic insight and seeing stronger than expected numbers could motivate more short covering in natural gas if the data can improve the macro economic outlook. But with the Fed in their latest Beige Book report only seeing modest improvements in the economy, the slow pace of the economic recovery being seen suggests a technical bounce in April natural gas may be limited to the $5.00 price level while the strong potential for fuel supplies to see a sharp build up during the injection season will ultimately keep downside price risk in place. Therefore, an eventual price break to $4.15 can't be ruled out.
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