Morning Macro News

113 total posts

Flight to Quality: Insights from the bond options skew

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Morning Macro News

posted by Jay Vanerstrom on 03/22/2016 at 12:43 pm
by Jay Vanerstrom on 03/22/2016

This morning the US markets awoke to news of terrorist bombings in Brussels. The normal reaction to unexpected news that could produce negative economic activity is one of flight to quality. Simply said, we see a shedding of riskier assets (stocks) combined with movement into the relative safety of Treasury notes/bonds. The decision to protect assets is usually an automatic reaction to significant, market disrupting news; deciding when it is safe to wade back into riskier assets though can be difficult to gauge. By viewing the volatility skew for options on treasury bond futures, you get a picture of flight to quality forces in effect and and when they wane. Be careful when the bond skew smiles. When charting volatility for options on bond futures, a normal skew will be generally downward sloping, with out of the money puts trading at a higher volatility than similarly out of the money calls (X-axis = strike price / Y-axis = implied volatility).  During flight to quality moves the market experiences concentrated periods of buying in Treasury bonds and their related futures contracts. This need to be long the bond market is often expressed conditionally through the purchase of out of the money…

This morning the US markets awoke to news of terrorist bombings in Brussels. The normal reaction to unexpected news that could produce negative economic activity is one of flight to quality. Simply said, we see a shedding of riskier assets (stocks) combined with movement into the relative safety of Treasury notes/bonds. The decision to protect assets is usually an automatic reaction to significant, market disrupting news; deciding when it is safe to wade back into riskier assets though can be difficult to gauge. By viewing the volatility skew for options on treasury bond futures, you get a picture of flight to quality forces in effect and and when they wane. Be careful when the bond skew smiles. When charting volatility for options on bond futures, a normal skew will be generally downward sloping, with out of the money puts trading at a higher volatility than similarly out of the money calls (X-axis = strike price / Y-axis = implied volatility).  During flight to quality moves the market experiences concentrated periods of buying in Treasury bonds and their related futures contracts. This need to be long the bond market is often expressed conditionally through the purchase of out of the money…

Today the 200 will drop below the 400!

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Morning Macro News

posted by CAPIS on 02/24/2016 at 7:05 am
by CAPIS on 02/24/2016

It’s official y’awl. As I’ve been writing for months now, the inevitable technical bad mojo moment in time is nigh. Yesterday, as you can see in the below chart of the SPX, the 200 day SMA closed at 2029.06, with the 400 SMA closing at 2029.05. THIS, ladies and gents, is the last time you’ll see the 200 above the 400 for some time, in my estimation. The 400 SMA is flattish now, with the 200 SMA downward sloping and looking to make further declines as the lower price levels take over the higher price level history each day. As I stated in last Thursday’s comment, I’d like to see the SPX rise above 1950 to test 2000 AND the 200 SMA from below, like it did in May 2008… but we may not see anything like that at all. Oil is pushing banks and equities lower, as global growth slowdown / China / whatever is the trendy news of the day gives shorts a big reason to lean more shorty.  As I’ve said, if you were to get short the SPX “today” with the 200 falling below the 400 SMA’s, this has historically been a good technical moment (for…

It’s official y’awl. As I’ve been writing for months now, the inevitable technical bad mojo moment in time is nigh. Yesterday, as you can see in the below chart of the SPX, the 200 day SMA closed at 2029.06, with the 400 SMA closing at 2029.05. THIS, ladies and gents, is the last time you’ll see the 200 above the 400 for some time, in my estimation. The 400 SMA is flattish now, with the 200 SMA downward sloping and looking to make further declines as the lower price levels take over the higher price level history each day. As I stated in last Thursday’s comment, I’d like to see the SPX rise above 1950 to test 2000 AND the 200 SMA from below, like it did in May 2008… but we may not see anything like that at all. Oil is pushing banks and equities lower, as global growth slowdown / China / whatever is the trendy news of the day gives shorts a big reason to lean more shorty.  As I’ve said, if you were to get short the SPX “today” with the 200 falling below the 400 SMA’s, this has historically been a good technical moment (for…

Here we go!

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Morning Macro News

posted by CAPIS on 02/18/2016 at 7:19 am
by CAPIS on 02/18/2016

Happy Thursday to you and Synthetic Friday to me! Well my last comment from Thursday Feb 11 (read it again here) was perfect. To wit, I wrote that I still feel the market is heading lower over the next few years, as the inevitable 200 SMA crossing below the 400 SMA would happen sometime this week perhaps, but that we were seeing some great buying at the new lows of year (LOY) and that a trade’s a trade so: Buy It. Of course buying it would have worked swell as the SPX has risen 100+ points off those lows in 5 days! Good Luck and have a most excellent weekend. Per this morning’s Bloomberg Daybook:  (Bloomberg) — European shares rise, with the Stoxx Europe 600 index extending a two-week high. U.S. stock index futures little changed, Asian shares rise. Wal-Mart, Duke Energy, Perrigo to report earnings. WHAT TO WATCH: Starboard Said to Take Initial Steps for Proxy Battle With Yahoo Ingram Micro to Be Bought by Tianjin Tianhai for $6 Billion PBOC to Conduct Open-Market Operations Every Working Day Bullard Calls Raising Rates Unwise as Inflation Falls Short Oil Extends Gain After Report of U.S. Crude Inventory Decline Nestle Sees…

Happy Thursday to you and Synthetic Friday to me! Well my last comment from Thursday Feb 11 (read it again here) was perfect. To wit, I wrote that I still feel the market is heading lower over the next few years, as the inevitable 200 SMA crossing below the 400 SMA would happen sometime this week perhaps, but that we were seeing some great buying at the new lows of year (LOY) and that a trade’s a trade so: Buy It. Of course buying it would have worked swell as the SPX has risen 100+ points off those lows in 5 days! Good Luck and have a most excellent weekend. Per this morning’s Bloomberg Daybook:  (Bloomberg) — European shares rise, with the Stoxx Europe 600 index extending a two-week high. U.S. stock index futures little changed, Asian shares rise. Wal-Mart, Duke Energy, Perrigo to report earnings. WHAT TO WATCH: Starboard Said to Take Initial Steps for Proxy Battle With Yahoo Ingram Micro to Be Bought by Tianjin Tianhai for $6 Billion PBOC to Conduct Open-Market Operations Every Working Day Bullard Calls Raising Rates Unwise as Inflation Falls Short Oil Extends Gain After Report of U.S. Crude Inventory Decline Nestle Sees…

New ESH6 LOY… Double Bottom or Short-Term Pause?

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Morning Macro News

posted by CAPIS on 02/11/2016 at 6:46 am
by CAPIS on 02/11/2016

Good Morning, This is me just popping in with a quick comment. ESH6 made new Lows Of Year (LOY) the last hour at 1802.50 (it was 1804.25 on January 20th when we made the hammer on the daily chart). The question, RIGHT NOW, becomes… is this a double bottom? Are we done going down? Should you buy this? I obviously don’t have the answers… BUT, I can say that pre-market, with volume at 480k contracts at 7:30 am ET, that there is a LOT of buying “down there”. It may be worth a shot, but quite frankly I still see us dropping to the 1700ish level on SPX, and potentially much lower over the next few years if this market really wants to come correct.  Still, a trade’s a trade, and long’s look to own this pre-market. Let’s see if oil et al can continue to push us to weekly and monthly support lines sub-1800 the next few weeks, but until otherwise noted:  Good Luck out there! Per this morning’s Bloomberg Daybook: (Bloomberg) — European stocks, U.S. index futures fall, oil drops. PepsiCo, Reynolds American, AIG, Teva, CBS report earnings. Eco. data includes Initial Jobless Claims, Bloomberg Consumer Comfort, Fed’s Yellen…

Good Morning, This is me just popping in with a quick comment. ESH6 made new Lows Of Year (LOY) the last hour at 1802.50 (it was 1804.25 on January 20th when we made the hammer on the daily chart). The question, RIGHT NOW, becomes… is this a double bottom? Are we done going down? Should you buy this? I obviously don’t have the answers… BUT, I can say that pre-market, with volume at 480k contracts at 7:30 am ET, that there is a LOT of buying “down there”. It may be worth a shot, but quite frankly I still see us dropping to the 1700ish level on SPX, and potentially much lower over the next few years if this market really wants to come correct.  Still, a trade’s a trade, and long’s look to own this pre-market. Let’s see if oil et al can continue to push us to weekly and monthly support lines sub-1800 the next few weeks, but until otherwise noted:  Good Luck out there! Per this morning’s Bloomberg Daybook: (Bloomberg) — European stocks, U.S. index futures fall, oil drops. PepsiCo, Reynolds American, AIG, Teva, CBS report earnings. Eco. data includes Initial Jobless Claims, Bloomberg Consumer Comfort, Fed’s Yellen…

NFP Day

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Morning Macro News

posted by CAPIS on 02/05/2016 at 7:22 am
by CAPIS on 02/05/2016

Good Morning! I really don’t have anything new to add versus what I’ve been writing about for nearly two months now. In this respect, I’m going to simply point to recent posts, and say the same rules apply. (1) Here’s my piece from mid-December about the 200 day SMA potentially falling below the 400 day SMA. THIS, above anything else, is what has me the most technically worried over the next few months… as of yesterday’s Close, the 200 SMA is only 10 points higher than the 400 SMA. https://www.capis.com/news/trading-desk/morning-macro-news/2015/12/18/7940/ (2) Next, here’s my piece on the Hammer from January 20th: https://www.capis.com/news/trading-desk/morning-macro-news/2016/01/21/8454/ To note, I wrote in that one that, “… If we’ve made a bottom, I want to see price back above 1900 and testing 1920. If we act like Aug 2015 then after rising we should come back down a bit and test those areas, maybe even 1867 for a while, before launching back higher again. We’ll see.” (3) Lastly, here’s my piece from Tuesday. Basically we’ve gone sideways around 1867 lows (Wednesday’s LOD was 1872) and 1920 highs the last few weeks, and NFP could be the catalyst to finally see us break above the 1920 area with volume…

Good Morning! I really don’t have anything new to add versus what I’ve been writing about for nearly two months now. In this respect, I’m going to simply point to recent posts, and say the same rules apply. (1) Here’s my piece from mid-December about the 200 day SMA potentially falling below the 400 day SMA. THIS, above anything else, is what has me the most technically worried over the next few months… as of yesterday’s Close, the 200 SMA is only 10 points higher than the 400 SMA. https://www.capis.com/news/trading-desk/morning-macro-news/2015/12/18/7940/ (2) Next, here’s my piece on the Hammer from January 20th: https://www.capis.com/news/trading-desk/morning-macro-news/2016/01/21/8454/ To note, I wrote in that one that, “… If we’ve made a bottom, I want to see price back above 1900 and testing 1920. If we act like Aug 2015 then after rising we should come back down a bit and test those areas, maybe even 1867 for a while, before launching back higher again. We’ll see.” (3) Lastly, here’s my piece from Tuesday. Basically we’ve gone sideways around 1867 lows (Wednesday’s LOD was 1872) and 1920 highs the last few weeks, and NFP could be the catalyst to finally see us break above the 1920 area with volume…

Turn Around Tuesday

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Morning Macro News

posted by CAPIS on 02/02/2016 at 7:03 am
by CAPIS on 02/02/2016

Well hello there! The SPX continues to follow my theory from the last two weeks. I haven’t been writing much because this market is mostly a “wait and see” market, as investors are calmly sitting on hands before trading it (see UBS earnings for confirmation). Peak Earnings Season for the SPX is done, and now we get SMID cap names reporting and some of the other SPX names over the next few weeks. As far as this week goes, we get ADP tomorrow with Oil Inventories, and NFP/Unemployment Rate on Friday. Party on Wayne!   Good Luck today! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares, U.S. equity index futures, Asian stocks fall. Earnings include Exxon Mobil, UPS, Sensata Technologies, CIT and Harris. Economic data due include Redbook weekly sales, ISM New York, IBD/TIPP economic optimism, Wards vehicle sales. WHAT TO WATCH: Google Parent To Overtake Apple as World’s Most Valuable Company Anadarko Cuts Spending as It Seeks to Rebound From Record Loss Fox Seeks to Cut $250 Million in Costs Through Staff Buyouts Surge in End-of-Lease Cars Seen Pressuring Prices in Record Year Automakers to report Jan. U.S. Sales today U.S. Navy Budget Plans $13b to Replace Nuke-Armed Submarines: Reuters…

Well hello there! The SPX continues to follow my theory from the last two weeks. I haven’t been writing much because this market is mostly a “wait and see” market, as investors are calmly sitting on hands before trading it (see UBS earnings for confirmation). Peak Earnings Season for the SPX is done, and now we get SMID cap names reporting and some of the other SPX names over the next few weeks. As far as this week goes, we get ADP tomorrow with Oil Inventories, and NFP/Unemployment Rate on Friday. Party on Wayne!   Good Luck today! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares, U.S. equity index futures, Asian stocks fall. Earnings include Exxon Mobil, UPS, Sensata Technologies, CIT and Harris. Economic data due include Redbook weekly sales, ISM New York, IBD/TIPP economic optimism, Wards vehicle sales. WHAT TO WATCH: Google Parent To Overtake Apple as World’s Most Valuable Company Anadarko Cuts Spending as It Seeks to Rebound From Record Loss Fox Seeks to Cut $250 Million in Costs Through Staff Buyouts Surge in End-of-Lease Cars Seen Pressuring Prices in Record Year Automakers to report Jan. U.S. Sales today U.S. Navy Budget Plans $13b to Replace Nuke-Armed Submarines: Reuters…

FOMC yeah you know me!

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Morning Macro News

posted by CAPIS on 01/27/2016 at 8:13 am
by CAPIS on 01/27/2016

Good Morning and happy Wednesday! So far the market is running the script I laid out in my last comment (read it again here). Last Wednesday we hammered on the daily chart, and have since been testing expected resistance areas (1900-1920) and support (1867-1890). We have a bunch of names moving on earnings pre-market (AAPL, T, BA, BIIB, etc) and a bunch to read about after market (FB, LVS, TXN, EBAY, etc.). All that said… it’s all about the FOMC this afternoon (and Crude Inventories at 10:30 am ET, don’t forget)!! I’m not changing my stance from what I wrote last Thursday. Let’s see what the market wants to do after the Fed gives indication to if it’s dovish enough or not. Remember: fade the initial move, intraday, post-Fed decision!!! Good luck! Per this morning’s Bloomberg Daybook: (Bloomberg) — U.S. equity index futures fall with European shares as Asian equities rise ahead of FOMC rate decision. Oil resumes drop on inventory forecasts, while gold, silver, copper, most food commodities drop. U.S. earnings include Facebook, United Technologies, Boeing, QualComm, SanDisk. Economic data include mortgage applications, new home sales, EIA crude inventory report. WHAT TO WATCH: FOMC rate decision due; follow TOPLive for our…

Good Morning and happy Wednesday! So far the market is running the script I laid out in my last comment (read it again here). Last Wednesday we hammered on the daily chart, and have since been testing expected resistance areas (1900-1920) and support (1867-1890). We have a bunch of names moving on earnings pre-market (AAPL, T, BA, BIIB, etc) and a bunch to read about after market (FB, LVS, TXN, EBAY, etc.). All that said… it’s all about the FOMC this afternoon (and Crude Inventories at 10:30 am ET, don’t forget)!! I’m not changing my stance from what I wrote last Thursday. Let’s see what the market wants to do after the Fed gives indication to if it’s dovish enough or not. Remember: fade the initial move, intraday, post-Fed decision!!! Good luck! Per this morning’s Bloomberg Daybook: (Bloomberg) — U.S. equity index futures fall with European shares as Asian equities rise ahead of FOMC rate decision. Oil resumes drop on inventory forecasts, while gold, silver, copper, most food commodities drop. U.S. earnings include Facebook, United Technologies, Boeing, QualComm, SanDisk. Economic data include mortgage applications, new home sales, EIA crude inventory report. WHAT TO WATCH: FOMC rate decision due; follow TOPLive for our…

Potential Hammer on the daily chart for SPX

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Morning Macro News

posted by CAPIS on 01/21/2016 at 7:41 am
by CAPIS on 01/21/2016

I’ll keep this brief, and simply post what I wrote some guys on my desk this morning. Good Luck today! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares rise as investors wait for remarks by ECB President Mario Draghi. Asian stocks, U.S. stock index futures decline. Crude oil fluctuates. Dollar little changed against euro. Verizon, Starbucks, Schlumberger, American Express to report earnings. WHAT TO WATCH: Draghi’s Oil-Crash Struggle Evokes ECB Reply to 2011 Spike ECB PREVIEW: Draghi to Favor a Balancing Act as Policy on Hold Davos China Delegates Urged to Communicate Better After Turmoil World Economic Forum in Davos Continues into Second Day Synaptics Said Moving Closer to Deal With China-Backed Investor S&P 500 Futures Drop as Asia Stocks and Oil Fall; Ruble Tumbles Macy’s Buyout Would Be a Miracle on 34th Street, Investors Say Viacom Says Redstone’s 2015 Pay Declined 85% to $2 Million Sharp Said to Favor INCJ’s Rescue Plan Over Higher Foxconn Offer Barclays Said Trimming 1,000 Jobs, About a Quarter in Asia Schlumberger Seen as Only Oil Servicer Standing as Margins Slump Blackstone Sees Opportunities in European Bank Assets, CEO Says Ahold Posts Higher Quarterly Sales on Recovery in U.S. Blizzard Expected to Bury Washington…

I’ll keep this brief, and simply post what I wrote some guys on my desk this morning. Good Luck today! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares rise as investors wait for remarks by ECB President Mario Draghi. Asian stocks, U.S. stock index futures decline. Crude oil fluctuates. Dollar little changed against euro. Verizon, Starbucks, Schlumberger, American Express to report earnings. WHAT TO WATCH: Draghi’s Oil-Crash Struggle Evokes ECB Reply to 2011 Spike ECB PREVIEW: Draghi to Favor a Balancing Act as Policy on Hold Davos China Delegates Urged to Communicate Better After Turmoil World Economic Forum in Davos Continues into Second Day Synaptics Said Moving Closer to Deal With China-Backed Investor S&P 500 Futures Drop as Asia Stocks and Oil Fall; Ruble Tumbles Macy’s Buyout Would Be a Miracle on 34th Street, Investors Say Viacom Says Redstone’s 2015 Pay Declined 85% to $2 Million Sharp Said to Favor INCJ’s Rescue Plan Over Higher Foxconn Offer Barclays Said Trimming 1,000 Jobs, About a Quarter in Asia Schlumberger Seen as Only Oil Servicer Standing as Margins Slump Blackstone Sees Opportunities in European Bank Assets, CEO Says Ahold Posts Higher Quarterly Sales on Recovery in U.S. Blizzard Expected to Bury Washington…

Yikes!

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Morning Macro News

posted by CAPIS on 01/20/2016 at 7:28 am
by CAPIS on 01/20/2016

Happy Wednesday to you all! Well I took an extended weekend as my mother flew into town Thursday for the twins baptism on Sunday, and Finley’s 5th birthday party that afternoon! It was a friends and family filled weekend of nice weather and good times had by all. Unfortunately… the market did not have as much fun as I did! As I wrote on January 11th (read it again, in full, here): I posted on social media (LinkedIn, Twitter under @capisinc, etc.) yesterday afternoon that an 1888+ Close for SPX would be a doji (flat Open / Close), and after a downtrend would be a swing long moment. SPX rose to 1888… but then failed into the close, and ES in fact fell even further. So… non-confirmation (i.e. no trade with no confirm), and with the selling pressure afterwards, really not much to give anyone a good feeling. That’s all I have today! Let’s see if ES can bounce off it’s August lows for a bit and get SPX back above IT’s August lows… otherwise look lower my friends. Good luck! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares drop to 13-month low, led by basic resources, oil and financial stocks. Asian…

Happy Wednesday to you all! Well I took an extended weekend as my mother flew into town Thursday for the twins baptism on Sunday, and Finley’s 5th birthday party that afternoon! It was a friends and family filled weekend of nice weather and good times had by all. Unfortunately… the market did not have as much fun as I did! As I wrote on January 11th (read it again, in full, here): I posted on social media (LinkedIn, Twitter under @capisinc, etc.) yesterday afternoon that an 1888+ Close for SPX would be a doji (flat Open / Close), and after a downtrend would be a swing long moment. SPX rose to 1888… but then failed into the close, and ES in fact fell even further. So… non-confirmation (i.e. no trade with no confirm), and with the selling pressure afterwards, really not much to give anyone a good feeling. That’s all I have today! Let’s see if ES can bounce off it’s August lows for a bit and get SPX back above IT’s August lows… otherwise look lower my friends. Good luck! Per this morning’s Bloomberg Daybook: (Bloomberg) — European shares drop to 13-month low, led by basic resources, oil and financial stocks. Asian…

Turn-Around Tuesday

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Morning Macro News

posted by CAPIS on 01/12/2016 at 8:06 am
by CAPIS on 01/12/2016

Good Morning! A quick note after yesterday. After my post was published, I shared it on LinkedIn. I also wrote: “I’m looking for either a 1900 Close (negative), 1920 (neutral), or 1926.12 (doji on daily chart, and could point to trend exhaustion which has been down… meaning look up!).” Well it didn’t close exactly at 1926 (where the market Opened), but it was hanging there just before the close knocked it down a bit to 1923.67. As I wrote, this is a doji on the daily chart (flat open / close, and after a trend in one direction can point to exhaustion of that trend). This was even more evident, to me at least, with the large buying tail that existed between the Open / Close (we closed 10 points off highs, but also 22 points off lows). Add on the idea that statistically / historically the Tuesday of January OPEX week is the strongest / most bullish, and you have a recipe for “get long the Close”. Now… I don’t know if this means lows are in for the foreseeable future, or anything. It’s simply a trade (i.e. buy Monday Close, sell when up whatever you feel comfortable being…

Good Morning! A quick note after yesterday. After my post was published, I shared it on LinkedIn. I also wrote: “I’m looking for either a 1900 Close (negative), 1920 (neutral), or 1926.12 (doji on daily chart, and could point to trend exhaustion which has been down… meaning look up!).” Well it didn’t close exactly at 1926 (where the market Opened), but it was hanging there just before the close knocked it down a bit to 1923.67. As I wrote, this is a doji on the daily chart (flat open / close, and after a trend in one direction can point to exhaustion of that trend). This was even more evident, to me at least, with the large buying tail that existed between the Open / Close (we closed 10 points off highs, but also 22 points off lows). Add on the idea that statistically / historically the Tuesday of January OPEX week is the strongest / most bullish, and you have a recipe for “get long the Close”. Now… I don’t know if this means lows are in for the foreseeable future, or anything. It’s simply a trade (i.e. buy Monday Close, sell when up whatever you feel comfortable being…

So last week happened…

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Morning Macro News

posted by CAPIS on 01/11/2016 at 1:19 pm
by CAPIS on 01/11/2016

Good Afternoon, Firstly, my apologies in being sporadic of late in my comments. Work is busy, twins keep me up at night, and my heart hasn’t been in writing each day. Well last week was the worst week (to start a New Year) in history for the SPX. We closed lower by -5.97%, and it wasn’t even slightly pretty (unless you’re hedged / short). I thought, incorrectly, that we’d find our Low of Week that Wednesday. We staged a rally after my comments back to the 2000 level… but it was easily annihilated by the shorts. The 1993 level held for a time, but failing it only gave you more and more reason to turn short. I wrote about my fears in earlier comments (“Ho Oh No…” from December 18th before I went on vacation, and “Merry New Year!” written January 4th) with the December low and January Barometer (both of which were violated / happened, so negative signals all around), as well as the very LT picture with the 200 day SMA and 400 day SMA (from the Dec 18th comment). Obviously the talking heads are very negative right now on equities, and have every right to be. China circuit breakers;…

Good Afternoon, Firstly, my apologies in being sporadic of late in my comments. Work is busy, twins keep me up at night, and my heart hasn’t been in writing each day. Well last week was the worst week (to start a New Year) in history for the SPX. We closed lower by -5.97%, and it wasn’t even slightly pretty (unless you’re hedged / short). I thought, incorrectly, that we’d find our Low of Week that Wednesday. We staged a rally after my comments back to the 2000 level… but it was easily annihilated by the shorts. The 1993 level held for a time, but failing it only gave you more and more reason to turn short. I wrote about my fears in earlier comments (“Ho Oh No…” from December 18th before I went on vacation, and “Merry New Year!” written January 4th) with the December low and January Barometer (both of which were violated / happened, so negative signals all around), as well as the very LT picture with the 200 day SMA and 400 day SMA (from the Dec 18th comment). Obviously the talking heads are very negative right now on equities, and have every right to be. China circuit breakers;…

ADP was smoking

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Morning Macro News

posted by CAPIS on 01/06/2016 at 9:09 am
by CAPIS on 01/06/2016

I know… I know it’s ADP. Not the most reliable of reports, all things considered, but still… it was a VERY strong report before NFP / Unemployment Rate this Friday. Also, S&P emini futures (ESH6) were down nearly -40 points on the China growth fear / oil trade. Globex LOD was 1971.25 which equates to approximately S3 on SPX today (1978.73). If you COULD trade pre-market… you buy that. Now we have ISM Non-Manufacturing with Factory Orders / Capital Goods in 5 minutes as of this writing, and then of course the FOMC Meeting Minutes from last month when they raised rates. If the technical structure of looking for the High OR Low of week on a Wednesday occurs… then we should all be long equities off these new weekly lows for SPX at 1986.02. This also lines up with my comments from Monday of the 1993.26 level (December Lows) and 50% retracement level at 1991.74 The bull in me is hoping! Let’s see if it sticks. Otherwise… negative momo pre-market is going to see us drop nicely to the 1960 area. Happy Wednesday!  

I know… I know it’s ADP. Not the most reliable of reports, all things considered, but still… it was a VERY strong report before NFP / Unemployment Rate this Friday. Also, S&P emini futures (ESH6) were down nearly -40 points on the China growth fear / oil trade. Globex LOD was 1971.25 which equates to approximately S3 on SPX today (1978.73). If you COULD trade pre-market… you buy that. Now we have ISM Non-Manufacturing with Factory Orders / Capital Goods in 5 minutes as of this writing, and then of course the FOMC Meeting Minutes from last month when they raised rates. If the technical structure of looking for the High OR Low of week on a Wednesday occurs… then we should all be long equities off these new weekly lows for SPX at 1986.02. This also lines up with my comments from Monday of the 1993.26 level (December Lows) and 50% retracement level at 1991.74 The bull in me is hoping! Let’s see if it sticks. Otherwise… negative momo pre-market is going to see us drop nicely to the 1960 area. Happy Wednesday!  

Merry New Year!

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Morning Macro News

posted by CAPIS on 01/04/2016 at 9:36 am
by CAPIS on 01/04/2016

Good Morning Everyone, After a two-week hiatus from all things commentary, I’m back (and finally feeling my old self again). I was plagued with food poisoning, then a cough that eventually turned into bronchitis, and then pink eye (kids in daycare like to bring stuff home with them)! All making for a fun holiday season. Anyways, let’s take a look at our markets, shall we? The S&P 500 closed out the year lower by -0.70% for the first annual loss since 2011. The Dow Industrial’s closed lower by -2.23%, and the “point the way” Transport Index closed a whopping -17.85% lower (trying to tell us something?!?!)! On the bright side, the Nasdaq 100 closed up +8.43%. As we’ve all seen, it’s been a pretty poor year for the bulls, and those unhedged. While the SPX did not close a ton lower, there are way too many negative feelings going through our markets right now to give anyone a truly positive spin fundamentally or technically. It’s 10:04 am ET as I’m writing this, and the SPX is just now testing below 2000 on my screen. To note, just like the Santa Clause rally that petered out is something to talk about, we…

Good Morning Everyone, After a two-week hiatus from all things commentary, I’m back (and finally feeling my old self again). I was plagued with food poisoning, then a cough that eventually turned into bronchitis, and then pink eye (kids in daycare like to bring stuff home with them)! All making for a fun holiday season. Anyways, let’s take a look at our markets, shall we? The S&P 500 closed out the year lower by -0.70% for the first annual loss since 2011. The Dow Industrial’s closed lower by -2.23%, and the “point the way” Transport Index closed a whopping -17.85% lower (trying to tell us something?!?!)! On the bright side, the Nasdaq 100 closed up +8.43%. As we’ve all seen, it’s been a pretty poor year for the bulls, and those unhedged. While the SPX did not close a ton lower, there are way too many negative feelings going through our markets right now to give anyone a truly positive spin fundamentally or technically. It’s 10:04 am ET as I’m writing this, and the SPX is just now testing below 2000 on my screen. To note, just like the Santa Clause rally that petered out is something to talk about, we…

Ho Oh No…

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Morning Macro News

posted by CAPIS on 12/18/2015 at 8:05 am
by CAPIS on 12/18/2015

Happy Friday! As a quick aside: I am out all next week for my last vacation of the year, back on the 28th, so this is my last you’ll read for a bit! So the Fed raised rates Thursday, and also plotted (according to the dot plan) to raise rates approximately 4 more times by the end of 2016. The SPX rose on the news as short-covering was effected on Wednesday. The SPX closed higher by +1.45% to 2073.07, but as I said to my friends on the desk, the leaders were the most defensive of sub-sectors (Utilities, Telecom, Food/Staples, etc.), while the laggers of all the industries were your typical growth sub-sectors (energy, semis, tech, etc.). Thursday opened up, and I also mentioned that I thought we’d see a drop to the PP / 2060 level… and instead we dropped below both and moved to the value area from yesterday in the 2050-2055 area / S1 for the day. All in not unexpected, though, and everything seemed ok… Until the Close. SPX had a quick drop lower into the close to the tune of approximately 10 points in 10 minutes. SPX closed lower by -1.50% to 2041.89. But get…

Happy Friday! As a quick aside: I am out all next week for my last vacation of the year, back on the 28th, so this is my last you’ll read for a bit! So the Fed raised rates Thursday, and also plotted (according to the dot plan) to raise rates approximately 4 more times by the end of 2016. The SPX rose on the news as short-covering was effected on Wednesday. The SPX closed higher by +1.45% to 2073.07, but as I said to my friends on the desk, the leaders were the most defensive of sub-sectors (Utilities, Telecom, Food/Staples, etc.), while the laggers of all the industries were your typical growth sub-sectors (energy, semis, tech, etc.). Thursday opened up, and I also mentioned that I thought we’d see a drop to the PP / 2060 level… and instead we dropped below both and moved to the value area from yesterday in the 2050-2055 area / S1 for the day. All in not unexpected, though, and everything seemed ok… Until the Close. SPX had a quick drop lower into the close to the tune of approximately 10 points in 10 minutes. SPX closed lower by -1.50% to 2041.89. But get…

FOMC Tomorrow and Oil

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Morning Macro News

posted by CAPIS on 12/15/2015 at 7:41 am
by CAPIS on 12/15/2015

Happy Tuesday to you all! It’s been a solid week since I’ve written (been slammed here with programs and transitions the last week), so I have a lot of catching up to do. I don’t think there’s much to recap though, really, as we all know this market is jittery before the FOMC rate decision tomorrow (and the potential first rate increase since the Financial Crisis). Also, Crude has dropped considerably along with the USD (post Draghi). We’ve seen some very nice volume take the SPX below the 2014 Close / Flat line (2058.90), as well as the very important 2020 line (highs from September / lows from November. Below is a simple chart of this area and where we are now. As you can see we’re in a tight congestion area from September and early October, and we regained the 2020 level with yesterday’s Close. One can ALSO say that the double bottom from Aug-Sep was cancelled out as with the double top Nov-Dec. Basically we’re back to where we started, and this is the value area SPX is comfortable with until… TOMORROW! Good luck out there today! On a side-note, I mentioned last Monday (read it again here) that…

Happy Tuesday to you all! It’s been a solid week since I’ve written (been slammed here with programs and transitions the last week), so I have a lot of catching up to do. I don’t think there’s much to recap though, really, as we all know this market is jittery before the FOMC rate decision tomorrow (and the potential first rate increase since the Financial Crisis). Also, Crude has dropped considerably along with the USD (post Draghi). We’ve seen some very nice volume take the SPX below the 2014 Close / Flat line (2058.90), as well as the very important 2020 line (highs from September / lows from November. Below is a simple chart of this area and where we are now. As you can see we’re in a tight congestion area from September and early October, and we regained the 2020 level with yesterday’s Close. One can ALSO say that the double bottom from Aug-Sep was cancelled out as with the double top Nov-Dec. Basically we’re back to where we started, and this is the value area SPX is comfortable with until… TOMORROW! Good luck out there today! On a side-note, I mentioned last Monday (read it again here) that…

The Economy vs. Oil

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Morning Macro News

posted by CAPIS on 12/07/2015 at 8:42 am
by CAPIS on 12/07/2015

Happy Monday! Well Friday worked out rather perfectly didn’t it? I was cautious after my Thursday “whoops” call before Draghi and the deleveraging move we saw in all US denominated assets. Look at the daily chart and you’ll see us get very close to the upward sloping 50 day SMA for support. I suggested that I thought a break above 2063.25 on ES would see 2070-2080 area (read it again here). It worked like a charm, and in fact kept working at 2080 was broken; getting us near the Thursday ES highs of 2095.25 (Friday’s ES high was 2093). Even with the OPEC decision finally putting the kabash on technical oil bulls off $40 lows (including me), the SPX did not want to close negative on the week. Now… looking at the SPX daily chart, it was a very nice push to break Thursday highs, test Wednesday mid-point, and Close up +2.05% for the day. What you didn’t see was that we actually stayed within the Globex range for ES from Thursday (i.e. not truly breaking Thursday highs for futures). All that said, look at the weekly candles for SPX. You’ll see the last two weeks we Opened near 2090, went…

Happy Monday! Well Friday worked out rather perfectly didn’t it? I was cautious after my Thursday “whoops” call before Draghi and the deleveraging move we saw in all US denominated assets. Look at the daily chart and you’ll see us get very close to the upward sloping 50 day SMA for support. I suggested that I thought a break above 2063.25 on ES would see 2070-2080 area (read it again here). It worked like a charm, and in fact kept working at 2080 was broken; getting us near the Thursday ES highs of 2095.25 (Friday’s ES high was 2093). Even with the OPEC decision finally putting the kabash on technical oil bulls off $40 lows (including me), the SPX did not want to close negative on the week. Now… looking at the SPX daily chart, it was a very nice push to break Thursday highs, test Wednesday mid-point, and Close up +2.05% for the day. What you didn’t see was that we actually stayed within the Globex range for ES from Thursday (i.e. not truly breaking Thursday highs for futures). All that said, look at the weekly candles for SPX. You’ll see the last two weeks we Opened near 2090, went…

Reminder to write after eco hits…

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Morning Macro News

posted by CAPIS on 12/04/2015 at 8:35 am
by CAPIS on 12/04/2015

Happy Friday Everyone! Well, I was beaten by Draghi yesterday, as my Thursday comments (which I wrote pre-Draghi speech) did not factor in the possible disappointment investors would have with the ECB’s lack of increase in stimulus expected. Of course, that perfect storm hit and we saw a large sell off in the USD, as well as dollar denominated risk and safe assets (equities and bonds). The EUR surged by the most since the Fed announced it was going to start buying Treasuries in March 2009 (Bloomberg). So my theory that we’d go sideways into the Fed Decision on December 16th was instantly squashed a few minutes after I published my note. C’est la vie. Change the script, trade what the market says, enjoy the short ride if possible. This morning NFP added more jobs in November than forecast, underscoring the Fed’s confidence that the U.S. economy is strong enough to withstand higher borrowing costs. So rate rise in December is essentially “in”, and risk assets “should” be happy about it… … BUT… also OPEC set output limit at 31.5m b/d, raising its output ceiling. This shot oil lower and fell as much as -3% from being up almost 2%. Crude…

Happy Friday Everyone! Well, I was beaten by Draghi yesterday, as my Thursday comments (which I wrote pre-Draghi speech) did not factor in the possible disappointment investors would have with the ECB’s lack of increase in stimulus expected. Of course, that perfect storm hit and we saw a large sell off in the USD, as well as dollar denominated risk and safe assets (equities and bonds). The EUR surged by the most since the Fed announced it was going to start buying Treasuries in March 2009 (Bloomberg). So my theory that we’d go sideways into the Fed Decision on December 16th was instantly squashed a few minutes after I published my note. C’est la vie. Change the script, trade what the market says, enjoy the short ride if possible. This morning NFP added more jobs in November than forecast, underscoring the Fed’s confidence that the U.S. economy is strong enough to withstand higher borrowing costs. So rate rise in December is essentially “in”, and risk assets “should” be happy about it… … BUT… also OPEC set output limit at 31.5m b/d, raising its output ceiling. This shot oil lower and fell as much as -3% from being up almost 2%. Crude…

Can’t break on through to the other side!

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Morning Macro News

posted by CAPIS on 12/03/2015 at 7:31 am
by CAPIS on 12/03/2015

Good Morning! Pardon my lack of comments; I’ve been in the process of buying a car! Upgrading to something with slightly more cargo space (when you have 3 kids below the age of 5 in the backseat, things can get tight pretty quickly if you want to make a trip). Back in the saddle though. SPX moved slightly lower Monday as PDC from Friday kept it in check.  Tuesday saw a slow build higher in the afternoon, on lower volume, as we bled up to break above 2100 and Close near the highs; up +1.07% to 2102.63. Unfortunately… the SPX did non enjoy that level very well on Wednesday, as Yellen and then the California mass shootings put the risk market on hold. Not to mention the big move lower in crude (it fell -4.56% yesterday and made lows at 39.84 before closing at 39.94), and you had a recipe for a sell program or risk assets. SPX dropped and tested 2075 (on ESZ5) / S2  / 20 day SMA lows for a double bottom (which looks like an overnight swing buy to me), and it held for us to close lower by -1.10% The SPX dropped to its 200…

Good Morning! Pardon my lack of comments; I’ve been in the process of buying a car! Upgrading to something with slightly more cargo space (when you have 3 kids below the age of 5 in the backseat, things can get tight pretty quickly if you want to make a trip). Back in the saddle though. SPX moved slightly lower Monday as PDC from Friday kept it in check.  Tuesday saw a slow build higher in the afternoon, on lower volume, as we bled up to break above 2100 and Close near the highs; up +1.07% to 2102.63. Unfortunately… the SPX did non enjoy that level very well on Wednesday, as Yellen and then the California mass shootings put the risk market on hold. Not to mention the big move lower in crude (it fell -4.56% yesterday and made lows at 39.84 before closing at 39.94), and you had a recipe for a sell program or risk assets. SPX dropped and tested 2075 (on ESZ5) / S2  / 20 day SMA lows for a double bottom (which looks like an overnight swing buy to me), and it held for us to close lower by -1.10% The SPX dropped to its 200…

Let the Santa Clause Rally… Begin (maybe)!

News Trading Desk Morning Macro News

Morning Macro News

posted by CAPIS on 11/30/2015 at 7:11 am
by CAPIS on 11/30/2015

Happy Monday to ya, My title is meant to shock, but really it’s might just happen. We had a fantastically boring last week as the SPX opened Monday at 2089.41, rose as high as 2095.61 and low as 2070.29, and Closed at 2090.11 for a cute 1 point gain on the week (and flat Open/Close making a doji on the weekly). After such a turnaround the week before with the Paris attacks, as I stated before OPEX I thought we’d seen the low for November and most likely the end of year. This week should prove extra special fun with a TON of eco on the docket, not to mention Black Friday / Cyber Monday numbers, and not to mention today’s the last day to trade for the month, etc. Thanks for reading and good luck today! Talk at ya Wednesday. Per this morning’s Bloomberg Daybook:  (Bloomberg) — European stocks advance, reversing earlier declines, as investors speculate on further ECB stimulus ahead of Thursday’s meeting. BHP Billiton leads a slide in commodity producers. Asian shares decline, U.S. stock index futures gain. WHAT TO WATCH: Clicks Defeat Bricks During Retailers’ Black Friday Weekend French Police Detain Hundreds After Violent Clash in…

Happy Monday to ya, My title is meant to shock, but really it’s might just happen. We had a fantastically boring last week as the SPX opened Monday at 2089.41, rose as high as 2095.61 and low as 2070.29, and Closed at 2090.11 for a cute 1 point gain on the week (and flat Open/Close making a doji on the weekly). After such a turnaround the week before with the Paris attacks, as I stated before OPEX I thought we’d seen the low for November and most likely the end of year. This week should prove extra special fun with a TON of eco on the docket, not to mention Black Friday / Cyber Monday numbers, and not to mention today’s the last day to trade for the month, etc. Thanks for reading and good luck today! Talk at ya Wednesday. Per this morning’s Bloomberg Daybook:  (Bloomberg) — European stocks advance, reversing earlier declines, as investors speculate on further ECB stimulus ahead of Thursday’s meeting. BHP Billiton leads a slide in commodity producers. Asian shares decline, U.S. stock index futures gain. WHAT TO WATCH: Clicks Defeat Bricks During Retailers’ Black Friday Weekend French Police Detain Hundreds After Violent Clash in…

Holiday Week

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Morning Macro News

posted by CAPIS on 11/23/2015 at 7:21 am
by CAPIS on 11/23/2015

Happy Monday! I have a quick one today again, as there’s just not much to talk about. So let’s rehash how last week closed. As I wrote Thursday, I thought 2087 would be the big “go long” point for anyone looking to buy the ‘b’ of an “abc” breakout. It held as perfect resistance on Thursday (HOD was 2086.74) and then Friday saw us break through it to start the morning and get oh so close to the 2100 level I thought we might see (HOD on Friday was 2097.06). The HOD Friday ended up being only spitting distance from R3 (2098.21) and the buyers petered out as we mad our HOD the first hour. From there we stair-stepped lower with OPEX, eventually dropping below my big 2087 level to see if buyers existed (and they did, at 2085 just below R1). We Closed higher onthe day by +0.38% and the week up +3.27% for the week. That’s it! Good luck and maybe I’ll write one more time this week. We’ll see. If I don’t then have a wonderful Thanksgiving Holiday! Per this morning’s Bloomberg Daybook: (Bloomberg) — European stocks decline, led by miners, energy stocks which are tracking their underlying…

Happy Monday! I have a quick one today again, as there’s just not much to talk about. So let’s rehash how last week closed. As I wrote Thursday, I thought 2087 would be the big “go long” point for anyone looking to buy the ‘b’ of an “abc” breakout. It held as perfect resistance on Thursday (HOD was 2086.74) and then Friday saw us break through it to start the morning and get oh so close to the 2100 level I thought we might see (HOD on Friday was 2097.06). The HOD Friday ended up being only spitting distance from R3 (2098.21) and the buyers petered out as we mad our HOD the first hour. From there we stair-stepped lower with OPEX, eventually dropping below my big 2087 level to see if buyers existed (and they did, at 2085 just below R1). We Closed higher onthe day by +0.38% and the week up +3.27% for the week. That’s it! Good luck and maybe I’ll write one more time this week. We’ll see. If I don’t then have a wonderful Thanksgiving Holiday! Per this morning’s Bloomberg Daybook: (Bloomberg) — European stocks decline, led by miners, energy stocks which are tracking their underlying…

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