Stock market analysis and commentary from a trader's perspective

Friday, September 4, 2015

Friday -- NFP, JPY, Art Sales

S&P E-mini Futures:
Down hard.

News:
Employment data at 8:30am NY time. NFP payrolls. Traders seems to be flipping out because unemployment could fall to 5.2% (& cause a September rate hike).

Europe is down hard, much of it over 2% lower.

FX:
AUD & CAD weak. JPY stronger amid carry trade stress (stress causes carry covering which strengthens the yen). USD JPY has gotten into the equivalent area that I was fearful of yesterday in the S&P.

Treasuries:
Pushing higher ahead of NFP number.

Energy:
WTI crude remains firm. NG down 1% but still tucked inside a tight range.

Metals:
Gold and silver dripping once again.

S&P Outlook:
Could not risk it yesterday while working hard on the September Vogue writeup. Dumped my calls in the morning with a solid gain but left a lot of the table too. No worries. It was not an impressive day.

Europe seems to agree.

The area below 1903.07 still looks vulnerable, and as noted above, USDJPY got in there.

My gut is still telling me to expect more upside, but I will hold off on speculating (actually hedging) on higher price until the next setup occurs. That could take place sometime this morning, or not. There is simply too much event risk at this moment with NFP up soon to make a call.

For real-time action, there is social media.

Social Mood:
Picked up a key data point in this Bloomberg art world story.


"Global auction results in the first half of this year slid 5.8 percent to $8.1 billion from the same period in 2014 because of weak sales in China, the U.K., France and Germany, according to New York-based Artnet."

As mood is slipping, so too are art sales.

Hitting the publish button and shifting to the Vogue post right now. Almost finished . . .

Thursday, September 3, 2015

Thursday -- ECB Today, Payrolls Tomorrow

S&P E-mini Futures:
Modestly higher overnight.

News:
ECB meeting today. Hope is that Draghi will sound dovish. With deflation at his doorstep, he could sound quite accommodative. European markets are solidly in the green today in expectation of such.

Friday's US employment data could determine whether the Fed follows suit.

China markets are closed today for Victory Day.

FX:
AUD weak, CAD & JPY slightly stronger. The latter could be a red flag for continued rally in equities. USD slightly higher.

Treasuries:
Prices managing small bounces over the last few days but nothing impressive. Could keep pressure on lower prices and higher yields near term.

Energy:
WTI crude may have printed 5 waves down from its recent rally highs, but is bouncing well (with volume). NG continues to recline almost leisurely.

Metals:
Gold and silver down so far this morning. Silver's move from its 13.91 lows looks quite choppy.

S&P Outlook:
The action continues to feel like a B-wave...and that's what worries me as long as I hold weekly calls. The entire area below 1903.07 down to just above 1867 looks vulnerable to me if price can't break out.

Futures do look like they are trying to muster a break out topside, but may need more of a catalyst. Perhaps the ECB. Perhaps Draghi promising more. Who knows.

Yesterday's close above the 1946 area was a good start. It needs to hold.

Still not thinking the market has made its highs for the bounce. But it could get dicey below if people want to book profits before the long weekend.




Wednesday, September 2, 2015

Wednesday -- The Color Beige, Possible B-Wave, Superyacht Social Mood Alert

S&P E-mini Futures:
Higher after yesterday's crush.

News:
Fed Beige book is out today at 2pm NY time. Tea leaves will be scoured for any possible Dovishness in hopes of a September rate cut postponement or any possible hint of QE4.

FX:
JPY has healed enough for a modest rally in equities. Very high correlation with S&P 500, especially E-mini futures.

Treasuries:
2s and 5s still look a bit shaky vs 10s and 30s.

Energy:
WTI crude down another 1%, almost 10% off its recent highs. NG still looks uncertain.

Metals:
Gold and silver not catching bids.

S&P Outlook:
Still believe yesterday was a buy setup, although a difficult one. UVXY did explode and did pay for my SPY 195 calls by more than 2X, and that's all I cared about.

E-minis have printed a beautiful 5-waves up from yesterday's lows. So the bears will have their hands full. Viewing 1903.07 as a stop for now on the cash S&P.

If the B-wave scenario is correct, 2000 could be seen by Friday, ahead of the long weekend.

Social Mood Alert:
Russian billionaire Andrey Melnichenko spent $450million on his latest superyacht (sounds more like a supership).


"Sailing Yacht A" boasts eight decks, a glass observation area, is 468 feet long, and weighs 14,224 tons.

She will have a crew of about 54 people and will be the largest privately owned sailing yacht in the world.

The masts are taller than Big Ben's tower and its sails are bigger than a football field when all are flying.

Supposedly it will dwarf other famous super-yachts like The Maltese Falcon, owned by American venture capitalist Tom Perkins.

With all her biggest, largest, and best-est features, Sailing Yacht A, may be sounding a very loud social mood alert similar to Edward Dewey's Skyscraper Indicator popularized in the 1940s.

Tuesday, September 1, 2015

Tuesday -- Long But Wrong Weekend, China PMI, Counter-Intuitive Buy

S&P E-mini Futures:
Shredded once again on China fears.

News:
I thought yesterday was Labor Day. Took the day off, hung out a swanky beachside resort, worked on September Vogue, had a couple coconut drinks.

Made in the shade
Sometimes I amaze myself. As the Pistols say, sometimes I'm Pretty Vacant. At least now I'll have back-to-back long weekends.

China is flipping out the world again it would seem. Remarkably bad PMI numbers last night showed contraction. Futures were sold. Markets tanked.

FX:
JPY & CHF strength on this China story should be noted, as well as AUD & CAD weakness. Carry/safe haven bid, commodity sold. AUDJPY off over 2%. Huge move in FX.

Treasuries:
Tendency toward more inversion -- 2s broke swingpoints all the way back to June. Not good.

Energy:
WTI crude stalled on China slowdown fears, but may be set up for more highs. As much as I think the chart is suspect, the market doesn't care. And only the market matters.

Metals:
Gold and silver not very convincing of much higher in their current patterns for now.

S&P Outlook:
If the ABC or triangle thesis is correct, the market may be setting up for a counter-intuitive buy today.

It doesn't look impulsive up, and doesn't look impulsive down. So far, then, it feels like a building B-wave.

Hedging the last of my UVXY position at levels far above where they were at the most recent mkt lows (took profits in the pre-market already) with SPY weekly calls, probably 195s depending on price. Premiums are getting pumped due to VVIX -- VIX of VIX -- running higher than Lehman levels.

Interestingly, UVXY and TVIX had it right (for today's move at least) while VIX itself is nowhere near implied levels. Another reason why I want to hedge and spec long.

If wrong, UVXY will explode higher and the calls will likely go out worthless, but it keeps me from getting out too early.

Friday, August 28, 2015

Friday -- Dodging Storms and Central Bankers

S&P E-mini Futures:
Down but firming.

News:
Bloomberg -- "...tumbling energy prices counter [BOJ] Governor Haruhiko Kuroda’s effort to reflate the world’s third-biggest economy."

Reuters -- "...a broader risk that the U.S. central bank may struggle to meet its inflation target until the rest of the world plays along."

We are being conned. The keywords highlighted show that without inflation, central banks lose power. Without inflation, they can't steal as much of our money.

What does this mean for the market? Continued volatility unless there is another installment of QE.

They're in Jackson Hole right now, possibly planning for one.

Elsewhere, incredibly we may have dodged yet another storm. Erika seems to have passed by without much of anything. Perhaps there is some truth to the stories of El Yunque protecting the island.

FX:
USD stronger. JPY stronger. AUD & CAD weaker.

Treasuries:
2s & 10s broke minor swingpoints yesterday on higher volume while 5s & 30s did not. Watching closely for more clues.

Energy:
Did WTI crude rally 10% yesterday after I said its chart was still a bit suspect? Ha. well it still is.

Metals:
Gold and silver back in the dog house currently.

S&P Outlook:
Hopefully this is a better looking version of the chart I posted yesterday on Stocktwits & Twitter. It most likely needs above 2044.02 to work. Volume is lagging but ticks and A/Ds are strong, so we may not be "there" yet.

Thursday, August 27, 2015

Thursday -- Less Compelling

S&P E-mini Futures:
Up another 1% after yesterday's turnaround.

News:
No sooner did China become the new Fed than China was stripped of its laurels.

In a speech yesterday, NY Fed president Dudley deemed rate hikes this year to be "less compelling." Suddenly the Fed was back in control for a day, and Dudley became the new Bullard.

But with chatter about China reducing its US treasury holdings in order to facilitate the yuan revaluation, the clouds may darken soon.

They sure are darkening here as Erika gets closer . . .

FX:
AUD and CAD continue their recent war dance higher. CHF too. EUR and JPY weaker.

Treasuries:
Perhaps the China chatter is why the yield curve is higher yet again, and why price charts still look vulnerable.

This could be the worst thing for the Fed at the worst possible time -- losing control and being compelled to raise rates.

Energy:
WTI crude still well bid. Still a bit suspect from a chart perspective though. Ditto and ditto for NG.

Metals:
Gold may have lost its developing impulse pattern. Silver rolled over to a new low. Less compelling.

S&P Outlook:
Yesterday was a great turnaround. Yet 1954.09 has still not been exceeded to the upside, and the 38% retracement has not been reached. That should change today at the open (futures have done it).

If it does, 2000, 2053, and 2081 would still be possible.

If it doesn't, new lows could materialize sooner rather than later.

Still wanting this market to get as high as possible while looking less and less compelling internally. Viewing the next buy of TVIX at $8.50 or better.

Wednesday, August 26, 2015

Wednesday -- Not A Regular Post Today

I had my car shipped to Puerto Rico and have to pick it up this morning.

A maze of red tape awaits. Excise taxes, customs duties, stamps, plus treks to opposite sides of town instead of everything being under one roof means that I'll be busy for quite a while.

Tropical Storm Ericka is on her way and we are forecast to receive heavy rains, up to 8 inches. There are several things I want to stock up on. Danny was a complete dud, by the way.

Futures are up. Since I do not feel we have seen the lows yet, I'd like the market to bounce as high as possible on light volume so I can grab TVIX again well below $10.