Tag Archives for " T3 Take 3 "
T3’s Take 3: Mr. Market Is Still Telling the Most Boring Story on Earth
1) What a Boring Market Stocks are still in sleep mode, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite showing next-to-none movement. The Russell 2000 fell -0.5% to 1384.09, and in today’s low volatility environment, that actually counts as major movement. Traders are still debating just how hawkish the Fed is following its statement last week. That’s driving continued profit-taking in the US dollar, which helped gold catch a bid. Regional banks, which have been key in the post-election rally, are still dropping, while US Treasuries perked up again. 2) Wait and See? We’ve been falling asleep for the past month as day-to-day movement has gone to basically nothing. The word on the street is that traders are waiting on Thursday’s healthcare vote before putting their chips down. However, throughout the year, we’ve seen plenty of big events — Trump’s inauguration, then his first address, jobs numbers, the ECB, Fed statements, etc. — and none have driven real volatility for more than a few hours. So my big concern is that we’ll see some fireworks on the healthcare vote, and then head right back into this low-volatility snoozefest. 3) But There’s This… This morning, Bloomberg News reported that the CBOE SKEW Index rose for 5 straight days, the longest streak since June 2016. This indicates that traders are paying up for out-of-the-money options, which only pay off in the face of a huge market move. According to Bloomberg, the last time the SKEW Index was so high relative to the VIX, the VIX surged 65%. However, before throwing your money at VIX calls, consider that we’re dealing with a sample size of 1 — that’s far from reliable.
Continue Reading -->T3’s Take 3: The Go-Nowhere Market Is Still Going Nowhere
1) Another Day, Another Yawn I was really hoping that the Fed rate announcement and Dutch elections this week would spur some actual, real-life, lasting volatility. But following Wednesday’s post-Fed power rally, the market went right back into snooze mode. The S&P 500 fell -0.1% to 2378.25, with the Nasdaq flat. The Russell 2000 showed a little relative strength, which was nice to see. We also saw key large-cap tech stocks like Apple (AAPL) and nVidia (NVDA) rally intraday to finish near the highs of the day. Regional banks (KRE), which have been key in the post-election rally, also made a nice move off its morning low. 2) Levels to Watch in SPX This morning, T3 Live Chief Strategic Officer Scott Redler issued analysis of the S&P, saying the following: “Watch 2370-2377. We need to hold above that. Otherwise, more choppy downside can happen.” The S&P actually bottomed today at 2377.74, just missing Scott’s key range that would indicate trouble is ahead. So the bulls remain out of reach of the frustrated bears. 3) Quick Sentiment Update In yesterday’s Weekly Sentiment Update, I pointed out that the ISE Sentiment Index showed a huge surge in call options buying. But call buyers backed off quickly today. The ISE Sentiment Index fell to the low 70’s, indicating that traders went right back to buying up puts in anticipation of downside.. Increased put buying is actually good for the bulls, because it indicates that traders are still somewhat nervous. It’s very rare for traders to be skittish at the top.
Continue Reading -->T3’s Take 3: Do You Feel the Heat Around the Corner?
“Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner.” -Neil McCauley, as portrayed by Robert DeNiro in Heat Before I get started, I’d like to invite you to check out the replay of our latest webinar Why You Shouldn’t Fear Forex. 1) Is that the Heat Around the Corner? For what seems like the 900th day in a row, the S&P 500 failed to make a substantial move. The index fell -0.2% to 2170.95 — far from a disaster — but tension is starting to appear on the tape. The index is now trading below its lost its 8 and 21 day exponential moving averages, indicating a loss of short-term momentum. Crude oil is almost 10% off its highs. (more on this below) Biotechnology, which has been slumping since Presidential candidate Hillary Clinton’s attack on Mylan (MYL) last week, continued its losing streak. The Nasdaq Biotech ETF (IBB) recently lost its 20 day moving average, and it is sitting right on top of its 50 day moving average — a break of which could spook traders. However, keep in mind that the bears have not been able to score a real victory since June 27, when the S&P fell -1.8% post-Brexit. Since then, we have not had a single 1% down day. 2) Crude Oil Takes a Big Hit WTI crude oil dropped over 3% below $45 today on another bearish inventory report. The E.I.A. said US crude stocks rose 2.3 million barrels last week, which was well above the 1.3 million consensus. This was the second large surprise build in a row, giving traders another reason to take profits ahead of the September OPEC meeting in Algeria. There has been assorted chatter that OPEC will announce a production freeze at meeting, but that’s clearly up in the air. 3) The Hawk Trade Rages On The big hawk trade — long US dollar, long banks, and short gold — is still going strong on hopes of more Fed rate hikes. In the equity markets, the gold miners (GDX) continue to take the brunt of the damage, with GDX falling -1.6% after yesterday’s -4.9% decline. And on the flip side, regional banks (KRE) continue to be a source of leadership. KRE is a good ETF for active traders to follow since it makes bigger moves than the better-known S&P Financials ETF (XLF). Thursday’s Trading Calendar US Economics (Time Zone: EDT) 07:30 Challenger Job Cuts YoY (Aug): -57.10% 08:30 Nonfarm Productivity (2Q F): exp. -0.60%, prior -0.50% 08:30 Unit Labor Costs (2Q F): exp. 2.10%, prior 2.00% 08:30 Initial Jobless Claims (8/27): exp. 265k, prior 261k 08:30 Continuing Claims (8/20): exp. 2145k, prior 2145k 09:45 Bloomberg Consumer Comfort (8/28): prior 45.3 09:45 Markit US Manufacturing PMI (Aug F): exp. 52.1, prior 52.1 10:00 Construction Spending MoM (Jul): exp. 0.50%, prior -0.60% 10:00 ISM Manufacturing (Aug): exp. 52, prior 52.6 10:00 ISM Prices Paid (Aug): exp. 54.8, prior 55 10:00 ISM New Orders (Aug): prior 56.9 10:30 EIA Natural Gas Storage Change (8/26): exp. 42, prior 11 10:30 EIA Working Natural Gas Implied Flow (8/26): exp. 42, prior 11 12:25 Fed’s Mester Speaks to Kentucky Philanthropy Initiative Wards Domestic Vehicle Sales (Aug): exp. 13.50m, prior 13.77m Wards Total Vehicle Sales (Aug): exp. 17.20m, prior 17.77m Global Economics 03:15 EUR Spanish Manufacturing PMI 04:30 GBP Manufacturing PMI Earnings Before Open: Campbell Soup (CPB) Ciena Corp (CIEN) Joy Global (JOY) Lululemon Athletica (LULU) After Close: Ambarella (AMBA) Broadcom (AVGO) Smith & Wesson Holding (SWHC)
Continue Reading -->T3’s Take 3: 30 Days of Nothing…
Don’t Fear Forex… Are you a stock or options trader in search of new profit opportunities? Click here to attend a FREE forex trading webinar 1) 30-Day Grind Today was the 30th straight day that the S&P 500 index failed to make a 1% move. Year-to-date ahead of this stretch the S&P moved 1% about once every 3 days, so I’m not exaggerating when I say this is the most boring market I’ve ever seen. The index finished down -0.2% at 2184, while the Russell 2000 and Nasdaq Composite did slightly better. Deere (DE) and Foot Locker (FL) both rose sharply on their strong earnings reports, while biotech and oil service names fell. 2) Fed Follies! On Wednesday, the Fed released the dovish-leaning Minutes from its July meeting. But on Thursday, Fed officials Williams and Dudley both said rate hikes are on the table in the near-term, which has traders ratcheting up their rate hike expectations once again. That sent bond and gold lower today, while regional banks (which benefit from higher rates) caught a small bid. Next week, Fed Chair Janet Yellen will speak at an annual meeting of central bankers in Jackson Hole, Wyoming, and will likely give some more clues on the Fed’s near-term trajectory. Given the Fed’s erratic nature this year, there is no telling what she’ll say, so be very careful if you’re placing bets! 3) Kurt Capra on SCTY Today on T3 Live’s Virtual Trading Floor, my colleague Kurt Capra provided the following analysis on controversial solar stock Solar City (SCTY): SolarCity (SCTY) has been showing weakness and an inability to bounce. The daily chart is set up to break down: Look for a move under the bottom of the range sometime next week. P.S. Don’t forget to sign up for our FREE forex trading webinar. Monday’s Trading Calendar US Economics (Time Zone: EDT) 08:30 Chicago Fed Nat Activity Index (Jul): prior 0.16 Global Economics 08:30 CAD Wholesale Sales m/m Earnings Before Open: None of significance After Close: NQ Mobile Inc (NQ)
Continue Reading -->T3’s Take 3: (Un)Lucky 13
1) (Un)Lucky 13 Most would say thirteen is an unlucky number. Maybe this time around it will prove to be lucky. The S&P 500 was sideways for the thirteenth (13) straight session closing, down .11%. Most of the weight was caused by weakness in energy as the Energy Select Sector (XLE) was down just over 3%. Weakness in oil was the major reason for energy names being down. Read the Oil Update below, by Jeff Cooper for additional thoughts. We continued to see the Nasdaq outperform as it was able to ride the strength of theNasdaq Biotech. Index (IBB), which closed up 1.29%, to a .47% gain. Apple (AAPL) and Netflix (NFLX) were also up big today, gaining 1.80% and 3.56% respectively. 20 Year Treasury Bonds (TLT) were also down sharply, losing 1.49% 2) Oil Update Today, our friend Jeff Cooper is back to weigh in on oil: Oil bounced off its 200 day m.a. on Friday and judging by the outsized moves on many names in the sector such as CLR (flagged in this morning’s report as vulnerable) and CXO which left large range outside up days (to mention a few), it looks like many players suspected oil was going to make a V Bottom at its 200 day. However oil is right back down today despite a retreat in the dollar and it looks like our 38/39 square-out level is magnetizing oil lower—assuming this is part of a constructive pullback if that level holds. Today’s downdraft in many energy names following Friday’s sharp turnup puts the possibility of a Hook, Line & Sinker bearish pattern short term on the table. So we could see some fast, climactic action in coming sessions in the group especially if oil snaps 40 which was a key level on the way down early this year. 3) Who Says to Sell In May? The one and only Scott Redler lends his insight into how to navigate this market: Those who said, “sell in May and go away” didn’t do so well. Now a lot of people are saying to sell in August. Before we just go off following the crowd, let’s go step by step. The 8 day moving average is $216.54- if you are micro trader, you get out with a close below that. If you are more of a swing trader, use $215.30.Otherwise, stay the course. We have pivot resistance at $217.54. A trade and close above that, look for continuation towards $220, or a big Red Dog Reversal (RDR) with that pivot to give a clue. We’ll also want to see oil hold last week’s low.
Continue Reading -->T3’s Take 3: The Sideways Shuffle
By T3 Live Staff Come join us in a FREE webinar! Click here for the upcoming schedule. 1) The Sideways Shuffle Today we saw what many traders have been looking for; an up day in Oil. This is the first time in the last 7 sessions that Oil was able to close bullish. The S&P 500 was sideways, once again, but able to close near the top of the range, up 0.18%. It is closing in on a month since the last time the S&P has produced a 1% move or better. The Nasdaq outperformed, again, on heels of strong earnings from GOOGL and AMZN. Gold found its way to the top of the advancers’ column today, with GLD rising 1.05%. 2) Range Precedes Price Today, Jeff Cooper provided some insight into the action on DexCom (DXCM): Our old friend DXCM continues its runaway move. Note the Spike Volume Bottom in Feb that defined the washout when everyone who wanted out got out. The large range breakout on 7/19 on increasing volume saw DXCM reclaim 50 % of this years range. From that point, DXCM has been in runaway mode. Typically runaway moves don’t offer much in the way of daily pullbacks so using an Opening Range Breakout is a good strategy. Also buying on the first intraday pullback offers defined risk entry. Today for example DXCM gapped open, pulled back into the gap window and exploded higher. 3) In Weakness, Opportunity is Found Our friend, Kurt Capra provided an interesting take on yesterday’s bearish candle on Facebook (FB): So, Facebook (FB) reported earnings after the close on Wednesday leading to a gap up Thursday morning to new all-time highs. After dancing around the first 2 hours of the day, FB began to pullback into the gap. It proceeded all the way down, finally finding support at $124.00, leaving the daily chart with a large red candle. To most, that would be seen as bearish. But, if you look beyond face value, it is an opportunity to get long for a ride back to, and through all time highs. Why would this be case? Take a look at the hourly chart from today and you’ll see a pullback and double bottom. So, the red bar from Thursday was nothing more than a controlled pullback to support and the whole number ($124); nothing to be scared of. In fact, quite the opposite. To the trained eye, this is an opportunity to get long, from a great spot, and enjoy a ride back to, and through, all time highs. If fact, if you go back and look at the daily chart of FB, notice how many times red bars were negated within the next day or two? This is a powerful concept that combines multiple timeframes with pattern recognition; something all traders should intimately understand. P.S.- If a double bottom fails, it can be an even bigger opportunity…even in failure, there is opportunity!!
Continue Reading -->