Buy to close Apr 530/520 put spread for 0.05.
Well we just got our first nickel buy back. Cancel all orders that involve the 530/520 spread.
Tracker will be up to date soon.
Wednesday, March 24, 2010
Today's Market Guidance
Financial Overview:
After seeing another round of new highs in some market measures yesterday the equity market comes into the trade today sitting just below the recent highs. While prices are showing initial weakness in the early US trade, the German and European markets at times overnight were showing minor gains. While the Euro zone saw a better than expected PMI result and the German Ifo readings were also better than expected, there is also some concern about a US/Chinese trade battle and that would seem to leave prospects mixed to slightly negative in the early action. However, a Fed member overnight seemed to reiterate the need to leave US interest rates low and that probably provides a bit of a support to stock prices. While the market would seem to need something positive from the durables and or new home sales to justify the upward track, this market has been able to grind upward even in the face of slack numbers for most of the last two months! With the Fed's Yellen overnight suggesting that now is not the time to tighten, it is possible that stocks will be able to shake off a slight negative reaction to the US data this morning and attempt to claw out more gains.
DOW:
The June Mini Dow sits just below the high forged in the prior trading session. While we suspect that prices will see a bit of a dip in the wake of the scheduled data this morning, we expect the market to discount that weakness as a result of the weather. As suggested already, Fed comments overnight and ideas that Yellen (a policy Dove in some minds) could be offered the Vice Chairmanship at the Fed, would seem to give the bull camp some news to offset any disappointment that might arise in the wake of the US data flows. It is also possible that the trade will see the data today, as the last of the ultra soft data and therefore expectations for better March data ahead could become some sort of carrot for the bull camp. Certainly the market is becoming more overbought especially after the big range up extension yesterday, but there might be little in the way of close in support on the charts until the 10,807 level.
The market made a new contract high on the rally. Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 10917. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 10889 and 10917, while 1st support hits today at 10775 and below there at 10689.
S&P:
Despite the impressive range up extension in the prior trading session, the June S&P would seem to have little in the way of close-in support on the charts until the 1164.80 old high level. Ordinarily the S&P would have distinctly benefited from dovish Fed comments and favorable Euro zone data news overnight, but the market seems to be either partially overbought technically, or perhaps a little concerned about this morning's new home sales figures. We ultimately think the market will be able to shake off the data this morning, but we can't rule out some weakness into and perhaps through the data. Therefore we would look to the 1162 to 1164 level as a key pivot point this morning.
The market made a new contract high on the rally. The daily stochastics have crossed over up which is a bullish indication. Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside target is at 1178.62. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1175.25 and 1178.62, while 1st support hits today at 1163.75 and below there at 1155.63.
NASDAQ:
With the June Nasdaq easily the most overbought (based on COT position readings) and the market already sitting well above the level where the last COT report was measured, one should expect the Nasdaq to lag behind the rest of the market on rallies and lead the rest of the market on any breaks directly ahead. Given the steep upward track in the Nasdaq recently, close-in support isn't seen until the 1955 level on the charts. With up trend channel resistance not seen until the 1967.85 level.
Bonds:
While we might be giving too much credence to the European economic news overnight, the numbers from that area were markedly better than some expectations and notably better than prior readings and that led some analysts overnight to conclude that adverse weather did serve to weaken activity earlier this year. In other words, adverse weather seemed to hold back the European economy in February and data after that period showed a noted recovery. Therefore, that could lead some to conclude a similar potential economic recovery could be seen in the US, where the Eastern portion of the country (particularly the biggest source of hiring the US government) was impacted by a series of winter storms. Note: Today's Durable goods and New Home sales reports are still for February and not for March! With a couple Fed members recently suggesting that employment would improve this spring, one begins to get the impression that the next Non-farm payroll, or certainly the one for April will post a noted gain and therefore the recent bullish tilt in Treasuries looks to be challenged in the coming trading sessions. After a tight consolidation around both sides of 118-00 in the June bond contract recently, that would seem to hint at a slight loss of upside momentum. While we continue to think that residual uncertainty off the US economic outlook in the near term will generally provide the bull camp with ongoing support, we also think that the market is already finding it difficult to put together enough buying fuel to definitively extend the rally that has basically been in place since late December. However, with the market facing another auction leg today and the market yesterday not getting its typical lift off the auction that could mean longer maturities will have to provide even more support prices in the wake of the coming auctions, or some more distinct downside work might be seen on the charts. On the other hand, after seeing the third straight monthly US existing home sales decline in a row yesterday and seeing muted inflation readings last week, one might have expected the bulls to have displayed more dominance over the Treasury market this week. With $42 billion in 5 Year Notes to be auctioned later today and the poor market reaction to the auction yesterday, the bull camp is in bad need of something weak in the durable goods or new home sales figures or Treasuries could knuckle under and in the process send June bonds back below the 117-00 level. Furthermore, we think that June Notes could easily fall back below 116-24 in the event that any of the US numbers today are better than expected. Certainly seeing patently weak scheduled data today would catch some players pressing the downside early, but given any additional ammunition from decent data, that could really result in bonds and notes falling back toward the March lows!
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The market's close below the 1st swing support number suggests a moderately negative setup for today. The near-term upside objective is at 118-100. The next area of resistance is around 117-280 and 118-100, while 1st support hits today at 117-100 and below there at 117-050.
US Dollar:
The Dollar seems to be getting a distinct bid off renewed concerns that the EU summit that begins on Thursday won't provide tangible support to Greece. It is also possible that the Dollar is catching a bid because of renewed US/Chinese trade war dialogue. However, in the wake of the initial US/China rift over the vale of the Chinese currency, the Dollar didn't seem to be at all interested in the trade war threat. Therefore, we suspect that most of the Dollar gains this morning are the result of EU debt issues. In fact, the Euro is very weak against the Dollar this morning, despite Euro zone PMI readings and German Ifo readings that could have been considered supportive of the Euro. Perhaps a downgrade of Portugal overnight is another element adding into the Dollar bulls case. In short, the bear items in the Dollar are being shunted to the sidelines and the bullish items are being fully embraced and that is the hallmark of a bull trending market. In fact, the Dollar might rally today even in the face of slack US economic readings. A big range up extension in the Dollar would seem to leave support on the charts today at 81.60. Perhaps the trade is happy with ideas that the US Fed remains content with low rates and that ultimately a recovery will be entrenched before they pull back on the reins.
Gold:
April gold overnight fell back below the $1,095 level at times overnight, as the weight of weakness in the Euro seemed to give the bear camp confidence. Apparently the gold market is discounting news of potential declines in Russian gold output overnight and perhaps gold is simply tracking early US equity market weakness.
Silver:
While silver exchange stocks fell by 641,000 ounces yesterday afternoon and equity prices have been consistently higher recently the silver market comes into the Wednesday action under pressure. At least in the early going today, May silver fell back below the even number $17.00 level overnight on the charts with that slide thought to be mainly the result of surging gains in the US Dollar.
Crude Oil:
May crude oil has been hit by a double-whammy, first by weaker API numbers after the close yesterday and then by the sharp Dollar rally this morning. Last night's numbers, which were well above industry estimates for crude oil stocks, could prove to be a one-week aberration, but that might be only be determined by the EIA data released later on this morning. In any case, net outflows in the products last night would seem to indicate that there is some demand out there, particularly as we head towards the 'Spring break' driving season. Any benefit from the move in the U.S. stock market towards new highs this week has been offset this morning by Dollar strength against the European currencies. Apparently an upcoming E.U. summit is not expected to fix the ongoing problem with Greece sovereign debt and that has many physical commodity markets under pressure this morning. The energy complex certainly managed an impressive rejection of the weakness that was seen in the Monday trade, but it will be on ongoing battle to justify prices above the $80.00 level in the face of an ultra strong Dollar. Apparently the energy complex was partially lifted because of optimism generated in the wake of US economic readings Tuesday, that weren't as bad as expected. In other words, the bull camp seems to be capable of spinning some news into its favor. We continue to think that crude oil prices below $80.00 basis May crude oil are considered cheap, while prices above the $82.50 level are possibly considered a little expensive versus the current view on the economy. In fact, to mount a rise above the early March highs and in effect reach the highest level since early January, might require a tightening of product stocks, a weaker US dollar, rising equities and a noted improvement in scheduled US data flows. Unfortunately the trade today looks to get the opposite of bullish needs and that could allow for another temporary violation of the $80.00 level in May crude oil.
Natural Gas:
May natural gas has consolidated within its range of the past few days, but still sits squarely at multi-year lows in the early Wednesday action. As the sentiment here has been so negative, there is a possibility that a short-covering rally may take prices out of their current range, but only if noted weakness in crude oil prompts long crude oil/short natural gas spread players to liquidate. With the winter heating season finishing up, the natural gas market now needs to see clear indications that both household and industrial demand will be picking up to even begin to chew down excess supply levels. In fact, it might take some kind of political shift in Washington toward increased Natural gas use to effectively throw off the downtrend pattern. The only other major bottoming source we see in natural gas, would be for the outlook on the economy to improve distinctly.
After seeing another round of new highs in some market measures yesterday the equity market comes into the trade today sitting just below the recent highs. While prices are showing initial weakness in the early US trade, the German and European markets at times overnight were showing minor gains. While the Euro zone saw a better than expected PMI result and the German Ifo readings were also better than expected, there is also some concern about a US/Chinese trade battle and that would seem to leave prospects mixed to slightly negative in the early action. However, a Fed member overnight seemed to reiterate the need to leave US interest rates low and that probably provides a bit of a support to stock prices. While the market would seem to need something positive from the durables and or new home sales to justify the upward track, this market has been able to grind upward even in the face of slack numbers for most of the last two months! With the Fed's Yellen overnight suggesting that now is not the time to tighten, it is possible that stocks will be able to shake off a slight negative reaction to the US data this morning and attempt to claw out more gains.
DOW:
The June Mini Dow sits just below the high forged in the prior trading session. While we suspect that prices will see a bit of a dip in the wake of the scheduled data this morning, we expect the market to discount that weakness as a result of the weather. As suggested already, Fed comments overnight and ideas that Yellen (a policy Dove in some minds) could be offered the Vice Chairmanship at the Fed, would seem to give the bull camp some news to offset any disappointment that might arise in the wake of the US data flows. It is also possible that the trade will see the data today, as the last of the ultra soft data and therefore expectations for better March data ahead could become some sort of carrot for the bull camp. Certainly the market is becoming more overbought especially after the big range up extension yesterday, but there might be little in the way of close in support on the charts until the 10,807 level.
The market made a new contract high on the rally. Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 10917. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 10889 and 10917, while 1st support hits today at 10775 and below there at 10689.
S&P:
Despite the impressive range up extension in the prior trading session, the June S&P would seem to have little in the way of close-in support on the charts until the 1164.80 old high level. Ordinarily the S&P would have distinctly benefited from dovish Fed comments and favorable Euro zone data news overnight, but the market seems to be either partially overbought technically, or perhaps a little concerned about this morning's new home sales figures. We ultimately think the market will be able to shake off the data this morning, but we can't rule out some weakness into and perhaps through the data. Therefore we would look to the 1162 to 1164 level as a key pivot point this morning.
The market made a new contract high on the rally. The daily stochastics have crossed over up which is a bullish indication. Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside target is at 1178.62. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1175.25 and 1178.62, while 1st support hits today at 1163.75 and below there at 1155.63.
NASDAQ:
With the June Nasdaq easily the most overbought (based on COT position readings) and the market already sitting well above the level where the last COT report was measured, one should expect the Nasdaq to lag behind the rest of the market on rallies and lead the rest of the market on any breaks directly ahead. Given the steep upward track in the Nasdaq recently, close-in support isn't seen until the 1955 level on the charts. With up trend channel resistance not seen until the 1967.85 level.
Bonds:
While we might be giving too much credence to the European economic news overnight, the numbers from that area were markedly better than some expectations and notably better than prior readings and that led some analysts overnight to conclude that adverse weather did serve to weaken activity earlier this year. In other words, adverse weather seemed to hold back the European economy in February and data after that period showed a noted recovery. Therefore, that could lead some to conclude a similar potential economic recovery could be seen in the US, where the Eastern portion of the country (particularly the biggest source of hiring the US government) was impacted by a series of winter storms. Note: Today's Durable goods and New Home sales reports are still for February and not for March! With a couple Fed members recently suggesting that employment would improve this spring, one begins to get the impression that the next Non-farm payroll, or certainly the one for April will post a noted gain and therefore the recent bullish tilt in Treasuries looks to be challenged in the coming trading sessions. After a tight consolidation around both sides of 118-00 in the June bond contract recently, that would seem to hint at a slight loss of upside momentum. While we continue to think that residual uncertainty off the US economic outlook in the near term will generally provide the bull camp with ongoing support, we also think that the market is already finding it difficult to put together enough buying fuel to definitively extend the rally that has basically been in place since late December. However, with the market facing another auction leg today and the market yesterday not getting its typical lift off the auction that could mean longer maturities will have to provide even more support prices in the wake of the coming auctions, or some more distinct downside work might be seen on the charts. On the other hand, after seeing the third straight monthly US existing home sales decline in a row yesterday and seeing muted inflation readings last week, one might have expected the bulls to have displayed more dominance over the Treasury market this week. With $42 billion in 5 Year Notes to be auctioned later today and the poor market reaction to the auction yesterday, the bull camp is in bad need of something weak in the durable goods or new home sales figures or Treasuries could knuckle under and in the process send June bonds back below the 117-00 level. Furthermore, we think that June Notes could easily fall back below 116-24 in the event that any of the US numbers today are better than expected. Certainly seeing patently weak scheduled data today would catch some players pressing the downside early, but given any additional ammunition from decent data, that could really result in bonds and notes falling back toward the March lows!
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The market's close below the 1st swing support number suggests a moderately negative setup for today. The near-term upside objective is at 118-100. The next area of resistance is around 117-280 and 118-100, while 1st support hits today at 117-100 and below there at 117-050.
US Dollar:
The Dollar seems to be getting a distinct bid off renewed concerns that the EU summit that begins on Thursday won't provide tangible support to Greece. It is also possible that the Dollar is catching a bid because of renewed US/Chinese trade war dialogue. However, in the wake of the initial US/China rift over the vale of the Chinese currency, the Dollar didn't seem to be at all interested in the trade war threat. Therefore, we suspect that most of the Dollar gains this morning are the result of EU debt issues. In fact, the Euro is very weak against the Dollar this morning, despite Euro zone PMI readings and German Ifo readings that could have been considered supportive of the Euro. Perhaps a downgrade of Portugal overnight is another element adding into the Dollar bulls case. In short, the bear items in the Dollar are being shunted to the sidelines and the bullish items are being fully embraced and that is the hallmark of a bull trending market. In fact, the Dollar might rally today even in the face of slack US economic readings. A big range up extension in the Dollar would seem to leave support on the charts today at 81.60. Perhaps the trade is happy with ideas that the US Fed remains content with low rates and that ultimately a recovery will be entrenched before they pull back on the reins.
Gold:
April gold overnight fell back below the $1,095 level at times overnight, as the weight of weakness in the Euro seemed to give the bear camp confidence. Apparently the gold market is discounting news of potential declines in Russian gold output overnight and perhaps gold is simply tracking early US equity market weakness.
Silver:
While silver exchange stocks fell by 641,000 ounces yesterday afternoon and equity prices have been consistently higher recently the silver market comes into the Wednesday action under pressure. At least in the early going today, May silver fell back below the even number $17.00 level overnight on the charts with that slide thought to be mainly the result of surging gains in the US Dollar.
Crude Oil:
May crude oil has been hit by a double-whammy, first by weaker API numbers after the close yesterday and then by the sharp Dollar rally this morning. Last night's numbers, which were well above industry estimates for crude oil stocks, could prove to be a one-week aberration, but that might be only be determined by the EIA data released later on this morning. In any case, net outflows in the products last night would seem to indicate that there is some demand out there, particularly as we head towards the 'Spring break' driving season. Any benefit from the move in the U.S. stock market towards new highs this week has been offset this morning by Dollar strength against the European currencies. Apparently an upcoming E.U. summit is not expected to fix the ongoing problem with Greece sovereign debt and that has many physical commodity markets under pressure this morning. The energy complex certainly managed an impressive rejection of the weakness that was seen in the Monday trade, but it will be on ongoing battle to justify prices above the $80.00 level in the face of an ultra strong Dollar. Apparently the energy complex was partially lifted because of optimism generated in the wake of US economic readings Tuesday, that weren't as bad as expected. In other words, the bull camp seems to be capable of spinning some news into its favor. We continue to think that crude oil prices below $80.00 basis May crude oil are considered cheap, while prices above the $82.50 level are possibly considered a little expensive versus the current view on the economy. In fact, to mount a rise above the early March highs and in effect reach the highest level since early January, might require a tightening of product stocks, a weaker US dollar, rising equities and a noted improvement in scheduled US data flows. Unfortunately the trade today looks to get the opposite of bullish needs and that could allow for another temporary violation of the $80.00 level in May crude oil.
Natural Gas:
May natural gas has consolidated within its range of the past few days, but still sits squarely at multi-year lows in the early Wednesday action. As the sentiment here has been so negative, there is a possibility that a short-covering rally may take prices out of their current range, but only if noted weakness in crude oil prompts long crude oil/short natural gas spread players to liquidate. With the winter heating season finishing up, the natural gas market now needs to see clear indications that both household and industrial demand will be picking up to even begin to chew down excess supply levels. In fact, it might take some kind of political shift in Washington toward increased Natural gas use to effectively throw off the downtrend pattern. The only other major bottoming source we see in natural gas, would be for the outlook on the economy to improve distinctly.
ZB Swing Update
ZB is making a nice push lower for us this morning. This trade has been long in the making almost stopping us out two different times. We are going to move our take profit target up in hopes that this is the move lower we have been waiting for.
New Target @ 115'01
New Target @ 115'01
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