Monday, April 5, 2010
Rut Buy Back
We just got filled on our nickel buy back of the Apr 570/560 put spread. Tracker is up to date. Cancel all other 570/560 orders.
Today's Market Guidance
Financial Overview:
The stock market comes into the early Monday trade with a fresh new high from the year in the S&P and seemingly in a positive track off the payroll report from last Friday morning. While the holiday timing probably robbed the stock market of some bullish euphoria from the jobs report Friday it would appear that the up trend pattern remains in place through the long holiday week end. While there are some concerns that the payroll readings might spark another US discount rate hike, that sentiment isn't exactly front and center in the marketplace this morning. The trade will probably be benefited from an ISM Non Manufacturing report release this morning, especially since many economists think the service sector is the stalwart performer in the US economy. Therefore, the path of least resistance looks to remain up in the equity market in the Monday morning trade.
DOW:
The June Mini Dow did manage a fresh new high for the move in the early action today and that would seem to leave the bull camp in control. Up trend channel support in the June Mini Dow is seen at 10,837 today with that level climbing to 10,859 on Tuesday. The Commitments of Traders Futures and Options report as of March 30th for Dow Jones Index $5 showed Non-Commercial traders were net long 20,199 contracts, a decrease of -953 contracts. The Non-reportable traders were net short 117 contracts, a decrease of 3,201 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 20,082 contracts. This represents an increase of 2,248 contracts in the net long position held by these traders. Therefore, the Mini Dow isn't overbought and without additional buying capacity.
The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 10945. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 10929 and 10945, while 1st support hits today at 10867 and below there at 10820.
S&P:
As suggested already, the June S&P has already managed a fresh new high for the year in the early action today and that would seem to leave the bull camp in control. Surprisingly the Commitments of Traders Futures and Options report as of March 30th for S&P 500 Stock Index showed that Non-Commercial and Non-reportable traders held a net long position of just 475 contracts and that would seem to suggest that the market was technically balanced as of last Tuesday. Up trend channel support in the June S&P isn't seen until 1173.90 today with that support level moving up to 1178.10 on Tuesday.
The market made a new contract high on the rally. A bullish signal was given with an upside crossover of the daily stochastics. 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 1185.00. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1182.75 and 1185.00, while 1st support hits today at 1174.25 and below there at 1168.00.
NASDAQ:
While the Nasdaq charts appear to have lost some upside momentum over the last several weeks, the market has still managed a gap up opening this morning in response to the favorable US Non Farm payroll readings last week. However, the Commitments of Traders Futures and Options report as of March 30th for Nasdaq Mini showed the Non-Commercial and Non-reportable combined traders held a net long position of 66,117 contracts but since this represents a decrease of 3,467 contracts in the net long position from the prior week, we would suggest that the Nasdaq isn't excessively overbought yet.
Bonds:
Treasury prices enter the new trading week just above the late March lows and seemingly vulnerable to a fresh downside breakout. While the Commitments of Traders Futures and Options report as of March 30th for U.S. Treasury Bonds showed the Non-Commercial and Non-reportable combined traders held a net short position of 146,500 contracts that positioning is probably understated due to the full point slide seen in the wake of that report. It should also be noted that the Non-Commercial Net Short position hit a new record level at 255,207 contracts, which might suggest that bonds are at least partially technically oversold. Similarly the 10 Year Notes showed that their Non-Commercial and Non-reportable combined traders held a net short position of 294,612 contracts in the latest COT report, which represents an increase of 157,739 contracts in the net short position held by these traders over the prior week's readings. With only $82 billion in US Treasury supply to be floated this week, the downside pressure on Treasury prices from the supply front might be muted a bit, but with recent auction interest showing signs of waning, even a smaller auction size might serve to weaken prices. With a regularly scheduled Fed Board meeting this afternoon and the jump in Non Farm payroll from last Friday still fresh in the markets mind, there might be renewed fears of another minor tick up in the US discount rate as that supposedly tamps down inflation expectations and according to Fed officials a higher discount rate doesn't impact consumers. The market will be presented with an ISM Non manufacturing Index that will be released this morning and the trade is expecting a minimal up tick in that report, and therefore we suspect that the path of least resistance in Treasury prices this morning will be pointing downward. While June bonds might see initial support at the old low of 114-26, real support this morning might be pegged down at 114-15. Like bonds, Notes also sit right on consolidation support this morning and with higher global equity prices and calls for a minor up tick in the ISM Non manufacturing report, we also have to give the edge to the bear camp in the Note market. However, unlike the bond market, which has some support just below the market at the March lows, the Note market doesn't have any close-in support on the charts until the 115-00 level. Other than the oversold condition, the bull camp is mostly without a strong argument, as the residual impact of the Friday morning payroll report continues to weigh on prices. We would suggest that Note prices below 115-00 and Bond prices below 114-15 might represent a temporary oversold fundamental condition for the market, but we also suspect that trading ranges might narrow ahead and that the technicals might simply be corrected with sideways movement.
Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The outside day down is somewhat negative. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is now at 113-230. The next area of resistance is around 115-200 and 116-240, while 1st support hits today at 114-040 and below there at 113-230.
US Dollar:
For the most part, the Dollar has consolidated Friday's activity this morning with much of the overseas markets still on holiday. Although the post-Employment number action was illiquid, a net gain of over 100,000 private sector jobs was the catalyst in sending the Dollar rallying against most of the major currencies. As the market remains fairly quiet this morning, we may see ranges continue to be relatively small, as there is little on the near-term horizon that could match the impact of Friday's numbers on market sentiment. In spite of the wild action on Friday, it appears at first glance today that the Dollar is capable of holding a large portion of its recent strength, especially since the trade expects to see something Dollar positive from the ISM report. Apparently expectations of a US recovery are set to keep the Dollar well supported. The Commitments of Traders Futures and Options report as of March 30th for US Dollar showed Non-Commercial traders were net long 35,288 contracts, an increase of 3,019 contracts. The Non-reportable traders were net long 4,175 contracts, an increase of 1,216 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 39,463 contracts. This represents an increase of 4,235 contracts in the net long position held by these traders.
EURO:
Although still well above its recent lows, the end of March rally in the Euro seems to have been thwarted by Friday's numbers. With much of Europe still on holiday, it may be difficult to countervail the idea that the US economy is recovering and that higher yields might be found in the US. Euro Zone economic numbers have been decent lately, but the lingering questions over how the Greece debt situation was settled, continues to weigh on the Euro. The Commitments of Traders Futures and Options report as of March 30th for Euro showed Non-Commercial traders were net short 83,200 contracts, an increase of -9,757 contracts. The Non-reportable traders were net short 12,765 contracts, an increase of -5,485 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 95,965 contracts. This represents an increase of 15,242 contracts in the net short position held by these traders.
Gold:
With a slightly weaker US Dollar, higher equities and favorable leadership from platinum prices early today the bull camp in gold seems to be getting the benefit of outside market conditions in the early Monday morning trade. However, Indian gold prices were unable to put a definitively bullish face on their trade overnight, as that market was giving off very little direction. US Gold exchange Stocks for April 2nd were 9.975 million tons down 45,230 ounces from the prior trading session and that puts gold stocks at the lowest level in the past 11 trading sessions. The Commitments of Traders Futures and Options report as of March 30th for Gold showed Non-Commercial traders were net long 186,784 contracts, a decrease of -11,444 contracts. The Non-reportable traders were net long 36,098 contracts, a decrease of -6,396 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 222,882 contracts. This represents a decrease of 17,840 contracts in the net long position held by these traders.
Silver:
The May silver contract has managed a fresh new high for the move in the early Monday trade. At the end of last week it was noted that January Mexican silver production rose to 231,244 kilograms. Silver Stocks for April 2nd were 116.09 million tons up 244,427 ounces, with Silver stocks increasing in 12 of the last 21 trading sessions. The Commitments of Traders Futures and Options report as of March 30th for Silver showed Non-Commercial traders were net long 33,725 contracts, an increase of 891 contracts. The Non-reportable traders were net long 14,650 contracts, an increase of 460 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 48,375 contracts. This represents an increase of 1,351 contracts in the net long position held by these traders. As in the gold market, the silver market seems to be facing somewhat supportive outside market forces early this morning, with a weaker Dollar, generally higher equities and positive leadership in gold and platinum prices.
Crude Oil:
May crude oil managed to make more new highs this morning, as the strong economic numbers from Friday have helped to lift prices towards their highest levels since late 2008. However, with post-holiday conditions keeping overnight trading thin at best, prices have drifted off of their initial highs as we approach the US opening and that has caused some to suggest that the crude oil market is overbought. However, an explosion and fire at an oil refinery in Washington State, along with the seizure of a large tanker by Somali pirates have added to the near-term bullish sentiment in the market. In the end, ongoing expectations of economic recovery in the US, China, and in Europe are likely to provide even more support for crude prices ahead. The Commitments of Traders Futures and Options report as of March 30th for Crude Oil showed Non-Commercial traders were net long 204,737 contracts, an increase of 10,294 contracts. The Non-reportable traders were net long 15,513 contracts, an increase of 1,835 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 220,250 contracts. This represents an increase of 12,129 contracts in the net long position held by these traders over the prior week. With the June crude oil market to this morning's highs sitting as much as $4.40 a barrel above the level where the COT report was measured, it is possible that the COT positioning understates the magnitude of the net spec long in crude oil. However, we still suspect that a favorable ISM Non Manufacturing report will provide the market with an added lift this morning but the failure to hold above $86.00 on a close basis today could be deemed a quasi blow off top formation.
Natural Gas:
Thursday's massive turnaround from new lows for the move were supposedly prompted by the EIA storage numbers, but we suspect that fears of an improved macro economic outlook prompted some technical short covering in natural gas. However, by the early action today, it would seem like the natural gas market is showing signs of falling back on the charts. We continue to think that natural gas is due for some type of lift off a fresh energy policy initiative, especially with crude oil prices and natural gas prices diverging so significantly. With a Wall Street Journal article suggesting that US natural gas production data might have been overstated, that could be just the fundamental change to ward off the sellers and in turn prompt some fresh long term buying. The Commitments of Traders Futures and Options report as of March 30th for Natural Gas showed Non-Commercial traders were net short 80,527 contracts, a decrease of 7,433 contracts. The Non-reportable traders were net long 30,162 contracts, a decrease of -3,207 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 50,365 contracts and those shorts might be a little uncomfortable with the prospect of improving industrial demand and perhaps a downward revision on overall gas supply.
The stock market comes into the early Monday trade with a fresh new high from the year in the S&P and seemingly in a positive track off the payroll report from last Friday morning. While the holiday timing probably robbed the stock market of some bullish euphoria from the jobs report Friday it would appear that the up trend pattern remains in place through the long holiday week end. While there are some concerns that the payroll readings might spark another US discount rate hike, that sentiment isn't exactly front and center in the marketplace this morning. The trade will probably be benefited from an ISM Non Manufacturing report release this morning, especially since many economists think the service sector is the stalwart performer in the US economy. Therefore, the path of least resistance looks to remain up in the equity market in the Monday morning trade.
DOW:
The June Mini Dow did manage a fresh new high for the move in the early action today and that would seem to leave the bull camp in control. Up trend channel support in the June Mini Dow is seen at 10,837 today with that level climbing to 10,859 on Tuesday. The Commitments of Traders Futures and Options report as of March 30th for Dow Jones Index $5 showed Non-Commercial traders were net long 20,199 contracts, a decrease of -953 contracts. The Non-reportable traders were net short 117 contracts, a decrease of 3,201 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 20,082 contracts. This represents an increase of 2,248 contracts in the net long position held by these traders. Therefore, the Mini Dow isn't overbought and without additional buying capacity.
The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 10945. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 10929 and 10945, while 1st support hits today at 10867 and below there at 10820.
S&P:
As suggested already, the June S&P has already managed a fresh new high for the year in the early action today and that would seem to leave the bull camp in control. Surprisingly the Commitments of Traders Futures and Options report as of March 30th for S&P 500 Stock Index showed that Non-Commercial and Non-reportable traders held a net long position of just 475 contracts and that would seem to suggest that the market was technically balanced as of last Tuesday. Up trend channel support in the June S&P isn't seen until 1173.90 today with that support level moving up to 1178.10 on Tuesday.
The market made a new contract high on the rally. A bullish signal was given with an upside crossover of the daily stochastics. 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 1185.00. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1182.75 and 1185.00, while 1st support hits today at 1174.25 and below there at 1168.00.
NASDAQ:
While the Nasdaq charts appear to have lost some upside momentum over the last several weeks, the market has still managed a gap up opening this morning in response to the favorable US Non Farm payroll readings last week. However, the Commitments of Traders Futures and Options report as of March 30th for Nasdaq Mini showed the Non-Commercial and Non-reportable combined traders held a net long position of 66,117 contracts but since this represents a decrease of 3,467 contracts in the net long position from the prior week, we would suggest that the Nasdaq isn't excessively overbought yet.
Bonds:
Treasury prices enter the new trading week just above the late March lows and seemingly vulnerable to a fresh downside breakout. While the Commitments of Traders Futures and Options report as of March 30th for U.S. Treasury Bonds showed the Non-Commercial and Non-reportable combined traders held a net short position of 146,500 contracts that positioning is probably understated due to the full point slide seen in the wake of that report. It should also be noted that the Non-Commercial Net Short position hit a new record level at 255,207 contracts, which might suggest that bonds are at least partially technically oversold. Similarly the 10 Year Notes showed that their Non-Commercial and Non-reportable combined traders held a net short position of 294,612 contracts in the latest COT report, which represents an increase of 157,739 contracts in the net short position held by these traders over the prior week's readings. With only $82 billion in US Treasury supply to be floated this week, the downside pressure on Treasury prices from the supply front might be muted a bit, but with recent auction interest showing signs of waning, even a smaller auction size might serve to weaken prices. With a regularly scheduled Fed Board meeting this afternoon and the jump in Non Farm payroll from last Friday still fresh in the markets mind, there might be renewed fears of another minor tick up in the US discount rate as that supposedly tamps down inflation expectations and according to Fed officials a higher discount rate doesn't impact consumers. The market will be presented with an ISM Non manufacturing Index that will be released this morning and the trade is expecting a minimal up tick in that report, and therefore we suspect that the path of least resistance in Treasury prices this morning will be pointing downward. While June bonds might see initial support at the old low of 114-26, real support this morning might be pegged down at 114-15. Like bonds, Notes also sit right on consolidation support this morning and with higher global equity prices and calls for a minor up tick in the ISM Non manufacturing report, we also have to give the edge to the bear camp in the Note market. However, unlike the bond market, which has some support just below the market at the March lows, the Note market doesn't have any close-in support on the charts until the 115-00 level. Other than the oversold condition, the bull camp is mostly without a strong argument, as the residual impact of the Friday morning payroll report continues to weigh on prices. We would suggest that Note prices below 115-00 and Bond prices below 114-15 might represent a temporary oversold fundamental condition for the market, but we also suspect that trading ranges might narrow ahead and that the technicals might simply be corrected with sideways movement.
Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The outside day down is somewhat negative. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is now at 113-230. The next area of resistance is around 115-200 and 116-240, while 1st support hits today at 114-040 and below there at 113-230.
US Dollar:
For the most part, the Dollar has consolidated Friday's activity this morning with much of the overseas markets still on holiday. Although the post-Employment number action was illiquid, a net gain of over 100,000 private sector jobs was the catalyst in sending the Dollar rallying against most of the major currencies. As the market remains fairly quiet this morning, we may see ranges continue to be relatively small, as there is little on the near-term horizon that could match the impact of Friday's numbers on market sentiment. In spite of the wild action on Friday, it appears at first glance today that the Dollar is capable of holding a large portion of its recent strength, especially since the trade expects to see something Dollar positive from the ISM report. Apparently expectations of a US recovery are set to keep the Dollar well supported. The Commitments of Traders Futures and Options report as of March 30th for US Dollar showed Non-Commercial traders were net long 35,288 contracts, an increase of 3,019 contracts. The Non-reportable traders were net long 4,175 contracts, an increase of 1,216 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 39,463 contracts. This represents an increase of 4,235 contracts in the net long position held by these traders.
EURO:
Although still well above its recent lows, the end of March rally in the Euro seems to have been thwarted by Friday's numbers. With much of Europe still on holiday, it may be difficult to countervail the idea that the US economy is recovering and that higher yields might be found in the US. Euro Zone economic numbers have been decent lately, but the lingering questions over how the Greece debt situation was settled, continues to weigh on the Euro. The Commitments of Traders Futures and Options report as of March 30th for Euro showed Non-Commercial traders were net short 83,200 contracts, an increase of -9,757 contracts. The Non-reportable traders were net short 12,765 contracts, an increase of -5,485 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 95,965 contracts. This represents an increase of 15,242 contracts in the net short position held by these traders.
Gold:
With a slightly weaker US Dollar, higher equities and favorable leadership from platinum prices early today the bull camp in gold seems to be getting the benefit of outside market conditions in the early Monday morning trade. However, Indian gold prices were unable to put a definitively bullish face on their trade overnight, as that market was giving off very little direction. US Gold exchange Stocks for April 2nd were 9.975 million tons down 45,230 ounces from the prior trading session and that puts gold stocks at the lowest level in the past 11 trading sessions. The Commitments of Traders Futures and Options report as of March 30th for Gold showed Non-Commercial traders were net long 186,784 contracts, a decrease of -11,444 contracts. The Non-reportable traders were net long 36,098 contracts, a decrease of -6,396 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 222,882 contracts. This represents a decrease of 17,840 contracts in the net long position held by these traders.
Silver:
The May silver contract has managed a fresh new high for the move in the early Monday trade. At the end of last week it was noted that January Mexican silver production rose to 231,244 kilograms. Silver Stocks for April 2nd were 116.09 million tons up 244,427 ounces, with Silver stocks increasing in 12 of the last 21 trading sessions. The Commitments of Traders Futures and Options report as of March 30th for Silver showed Non-Commercial traders were net long 33,725 contracts, an increase of 891 contracts. The Non-reportable traders were net long 14,650 contracts, an increase of 460 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 48,375 contracts. This represents an increase of 1,351 contracts in the net long position held by these traders. As in the gold market, the silver market seems to be facing somewhat supportive outside market forces early this morning, with a weaker Dollar, generally higher equities and positive leadership in gold and platinum prices.
Crude Oil:
May crude oil managed to make more new highs this morning, as the strong economic numbers from Friday have helped to lift prices towards their highest levels since late 2008. However, with post-holiday conditions keeping overnight trading thin at best, prices have drifted off of their initial highs as we approach the US opening and that has caused some to suggest that the crude oil market is overbought. However, an explosion and fire at an oil refinery in Washington State, along with the seizure of a large tanker by Somali pirates have added to the near-term bullish sentiment in the market. In the end, ongoing expectations of economic recovery in the US, China, and in Europe are likely to provide even more support for crude prices ahead. The Commitments of Traders Futures and Options report as of March 30th for Crude Oil showed Non-Commercial traders were net long 204,737 contracts, an increase of 10,294 contracts. The Non-reportable traders were net long 15,513 contracts, an increase of 1,835 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 220,250 contracts. This represents an increase of 12,129 contracts in the net long position held by these traders over the prior week. With the June crude oil market to this morning's highs sitting as much as $4.40 a barrel above the level where the COT report was measured, it is possible that the COT positioning understates the magnitude of the net spec long in crude oil. However, we still suspect that a favorable ISM Non Manufacturing report will provide the market with an added lift this morning but the failure to hold above $86.00 on a close basis today could be deemed a quasi blow off top formation.
Natural Gas:
Thursday's massive turnaround from new lows for the move were supposedly prompted by the EIA storage numbers, but we suspect that fears of an improved macro economic outlook prompted some technical short covering in natural gas. However, by the early action today, it would seem like the natural gas market is showing signs of falling back on the charts. We continue to think that natural gas is due for some type of lift off a fresh energy policy initiative, especially with crude oil prices and natural gas prices diverging so significantly. With a Wall Street Journal article suggesting that US natural gas production data might have been overstated, that could be just the fundamental change to ward off the sellers and in turn prompt some fresh long term buying. The Commitments of Traders Futures and Options report as of March 30th for Natural Gas showed Non-Commercial traders were net short 80,527 contracts, a decrease of 7,433 contracts. The Non-reportable traders were net long 30,162 contracts, a decrease of -3,207 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 50,365 contracts and those shorts might be a little uncomfortable with the prospect of improving industrial demand and perhaps a downward revision on overall gas supply.
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