Crude and the Yen reverse yesterday's moves, so does the ES
Obviously, the market panicked a bit when in regard to the implication of a Yen rally. Although this is the highest we've seen the Yen in years, it is still historically cheap. Further, today's reversal suggests the unwinding of the carry trade isn't quite upon us. Accordingly, this should be somewhat supportive of the equity markets.
On another note, the greenback is still trading sluggishly, but it has yet to break support. In theory, weakness in the dollar should help push commodity prices higher, and eventually the stock market as well. As a result, we'll need to keep an eye on the DX support near 93.00.
Triple top premise still in play in bonds
As is generally the case, the Treasury market was over-bid yesterday as fear took hold, but relaxed today as cooler heads prevailed. Unfortunately, it is easier said than done, but the general rule of thumb is that "you can't make money panicking".
Bonds and notes have both (nearly) tested the January and February highs, which occurred as the S&P was closer to 18000. Consequently, it seems a lofty goal for the bulls to keep prices at such elevated levels. We've been early, or maybe wrong this week, but we are leaning lower.
Treasury Futures Market Analysis
**Bond Futures Market Consensus:** The ES seems stable, that should keep the bears in control of Treasuries.
**Technical Support:** ZB : 164'06, 163'04, 162;23, 160'27, 156'25, and 153'26 ZN: 129'15, 128'22, and 128'00
**Technical Resistance:** ZB : 167'14, 168'08, and 169'14 ZN: 131'10, 131'29, and 132'20
The ES likes 2040, prices are neutral
Although the stock market is probably closer to a major high, than a major low, the current short-term valuation is merely neutral. Despite some rather large moves up and down, the S&P migrates back to the mid to low 2040s. Thus, we can't think of any reason to be overly bullish, nor overly bearish given the equilibrium price action. With that said, should prices find their way to 2080, it would likely be a good place for the bears to get positioned.
Stock Index Futures Market Ideas
**e-mini S&P Futures Market Consensus:** We are relatively neutral for now, but a move to 2080 would pique our interest in getting bearish.
**Technical Support:** 2028, 1981, 1960, 1879
**Technical Resistance:** 2080, 2096, and 2112
e-mini S&P Futures Day Trading Ideas
**These are counter-trend entry ideas, the more distant the level the more reliable but the less likely to get filled**
ES Day Trade Sell Levels: Let's see what Monday looks like.
ES Day Trade Buy Levels: Let's see what Monday looks like.
In other commodity futures and options markets....
November 24 - Roll long December corn into March to avoid delivery.
January 14 - Sell March 10-year note 129.50 calls for about 19 ticks, or $300.
February 3 - Buy back the March 10-year note 129.50 call, and replace it with a 2 short April 132 calls and 1 short 128 put. This spreads the risk out on both sides of the market, and slows things down.
February 9 - Buy back the short ZN 128 put, replace it with 2 (double the quantity) of the 129 puts. This brings in more premium, and offers a better hedge to the upside risk.
February 11 - Roll ZN strangles higher to the 133.50/130.50 strikes to try to keep up with the rally and volatility.
February 17 - Buy back April ZN 133.50 calls to lock in a gain.
February 18 - Sell April ZN 131.50 calls for about 28 ticks to hedge the short 130.50 puts remaining from the original strangle.
March 2 - Buy back April ZN 131.50 calls near 8 ticks to lock in a gain.
March 3 - Sell April 130 calls for about 29 ticks to bring in more premium and hedge our short put position.
March 8 - Sell a May ZN 131 call for about 29 ticks. This brings our trade to only slightly bullish.
March 10 - Buy back the May ZN 131 call and all of the April 130 calls. This locks in profits on the call side of the trade, we'll hold the puts in hopes of a bounce.
March 14 - Sell May ZN 129 calls for about 40 ticks, to bring in more premium and hedge our downside risk.
March 17 - Buy back all April puts and May calls, then sell a fresh strangle using the May 130/128.50 strikes. This gets us into a more reasonable position which stands to profit from premium erosion (the previous trade was largely intrinsic value at the point of exit).
March 29 - Buy back May ZN puts to lock in a profit.
March 30 - Sell June ZN 128.50 puts to get back into strangles. This leaves the trade short May 130 calls, and June 128.50 puts...a short strangle with a slightly bearish stance.
March 30 - Sell June ES 2150 call near 10.00/11.00.
April 7 - Buy back ZN 128.50 puts near 9 to lock in a gain.
(Our clients receive short option trading ideas in other markets such as gold, crude oil, corn, soybeans, Euro, Yen, and more. Email us for more information)
Carley GarnerDeCarley Trading (a division of Zaner)
www.ATradersFirstBookonCommodities.com **There is substantial risk of loss in trading futures and options.** These recommendations are a solicitation for entering into derivatives transactions. All known news and events have already been factored into the price of the underlying derivatives discussed. From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Seasonal tendencies are a composite of some of the more consistent commodity futures seasonals that have occurred over the past 15 or more years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year. While seasonal trends may potentially impact supply and demand in certain commodities, seasonal aspects of supply and demand have been factored into futures & options market pricing. Even if a seasonal tendency occurs in the future, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the future, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.