Tag Archives for " economy "
Is Gold About to Get Cracked?
1) US Economic Data Comeback US economic data continues to firm up following a major drop in momentum since July. In the past week, we’ve seen decent new home sales, Markit Services PMI, durable goods, Chicago PMI, GDP, jobless claims, and ISM Manufacturing numbers. Check out this chart of the Citi US Economic Surprise Index — this could be the start of a new trend following a collapse in expectations: Some reports have been some clunkers, but overall, the strength of data relative to expectations is improving into Friday’s big NFP report. However… 2) Traders Aren’t Sold on the Fed Just Yet A lot of traders believe a December rate hike is a foregone conclusion. The numbers say otherwise. Fed funds futures imply a 61% probability of a December rate increase, so the market’s not buying in whole-hog. This brings us back to this week’s NFP report, which could move the numbers one way or the other. I’d especially be watching… 3) Gold! Call me crazy, but doesn’t this Gold (GLD) $125ish level look pivotal? Gold has been making lower highs, and I’d assume that a big NFP report on Friday could mean a very ugly break of this $125ish support level. There’s been a lot of talk about a possible head & shoulders forming over the past few weeks, but this bigger-picture pattern looks more important. 4) Is Twitter Still in Play? Today, Bloomberg reported that Google (GOOGL) is considering a bid for Twitter (TWTR). Google has perennially been seen as a logical buyer for Twitter because of the latter’s strength in real-time search. But the real good news for Twitter longs is the sheer number of rumored suitors floating around — Salesforce.com (CRM), Disney (DIS), and Microsoft (MSFT) have also been mentioned. This way, if one alleged suitor leaves the picture, we’ve still got others to prevent an all-out collapse. But I’ll still only believe this deal when I see it. Mark your calendars for Twitter’s Q3 earnings report on October 25 — it’s gonna be a big one! 5) A Boom in Call Options? The ISE Sentiment Index, which is my favorite short-term sentiment indicator, is reading 189 this morning as of 10:50 a.m. ET. That’s 189 calls for every 100 puts, which means rampant bullishness, at least on an intra-day basis. Perhaps ironically, we are seeing lots of activity in GLD. NFLX, TSLA, BMY, and CAB are also active. (TSLA announced strong sales, CAB is being taken over)
Continue Reading -->T3’s Take 3: Oil Moves, and That’s About It. Seriously.
Did you miss Dave Green’s webinar last night? Click here to check out a replay. By Michael Comeau 1) Lousy, Lousy, Lousy Numbers US economic data missed across the board today: -Retail sales were flat in July vs. consensus of +0.4% -PPI was -0.4% vs. consensus of +0.1% -U. of Michigan Sentiment for August was 90.4 vs. 91.5 consensus Let’s dive in and look at the trend: The Citi US Economic Surprise Index has surged this year — especially after the June 24 Brexit. This indicates that economic data was beating expectations However, it started diving with the weak July 29 GDP report. So while one day of weak numbers isn’t worth getting excited over, the trend is indeed turning down and should be watched. 2) YAWN… US stocks put in yet another remarkably boring low-volatility day. The S&P 500 traded in a very tight 7-point range before finishing -0.1% at 2184.05. The Nasdaq and Russell 2000 also barely moved. The real action today was in crude oil, which rose 2.7% to $44.65 after Saudi Arabia’s energy minister said OPEC may act to prop up the oil market. We also saw a nice intra-day rebound in biotechnology and pharmaceutical stocks, which slumped yesterday. The VIX dropped again today to reflect the lackluster action, though not everyone thinks that condition will last… 3) Jeff Cooper’s Volatility Play This afternoon, T3 Live’s Jeff Cooper initiated a long trade in UVXY from $21.14: An hourly SPX from 8/8 shows a possible Megaphone Top pattern on the hourlies. The index is trying to stabilize at its 50 period on the hourlies here, but if it falters before the bell the Megaphone pattern will be triggered. While this is a very short-term pattern, bull markets in a Friday (particularly summer Fridays) like to close at/near session highs so a meaningful extension to the downside before the close could indicate a reaction is on the table next week. Let’s initiate a PILOT long in UVXY, which is a leveraged volatility play. Timed correctly, UVXY is very explosive. But keep in mind this is a very volatile vehicle and may not be for everyone. Last August it went from $130 to $450 in 9 trading days. Click here for more information on Jeff Cooper’s Daily Market Report Monday’s Trading Preview US Economics (Time Zone: EDT) 08:30 Empire Manufacturing (Aug): exp. 2, prior 0.55 10:00 NAHB Housing Market Index (Aug): exp. 60, prior 59 16:00 Total Net TIC Flows (Jun): prior -$11.0b 16:00 Net Long-term TIC Flows (Jun): prior $41.1b Global Economics Sunday 19:50 JPY GDP Monday 00:30 JPY Industrial Production 09:00 CAD Existing Home Sales 21:30 AUD RBA Aug. Meeting Minutes Earnings Before the Open: 500.com (WBAI) After the Close: Fabrinet (FN) Vipshop Holdings (VIPS) Sysco (SYY)
Continue Reading -->Economic Data Stinks. Does It Matter?
So far this morning, US economic data has missed across the board: -Retail sales were flat in July vs. consensus of +0.4% -PPI was -0.4% vs. consensus of +0.1% -U. of Michigan Sentiment for August was 90.4 vs. 91.5 consensus There is often a major disconnect between economic data and stock prices, but let’s dive in anyway. Individual economic data points are not very important. They may have a short-term impact, but trends are what really matter for markets (and central banks for that matter.) The trend is what really matters. So let’s look at the trend. The Citi US Economic Surprise Index has surged this year — especially after the June 24 Brexit: However, it took a big hit on the weak July 29 GDP report, and this recent streak of mixed data may be hurting the trend. And now, perception of the Fed (which is way more important than what the Fed actually does), is shifting back towards dove territory. Fed funds futures now indicate a 39% chance of a December rate hike, down from 47% last week. This is giving the big G.U.T.S. trade (gold, utilities, Treasuries, silver) quite a revival. And we are seeing weakness in banks, particularly the regionals (KRE). That means the numbers are on the verge of starting to matter. But this is just a start — follow-through is what matters. If the banks really start faltering and the G.U.T.S. trade takes on new life, then the data may in fact mean something. Let’s not get excited until things get exciting.
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