Morning Call Express
In today’s Morning Call Express, Scott Redler talks about the SPX and how to use the 8 and 21 day to your advantage for cash flow as well as a portfolio approach. He also looks at Gold, AAPL, BABA, and banks.
Continue Reading -->The Morning Hammer: Temperature Rising
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! We’re waking up to slightly shakier markets today. European carmakers are down after the US Department of Justice found evidence of criminal acts by Volkswagen AG relatded to its emissions cheating scandal. That’s helping push the Euro Stoxx 50 down -0.8%, while the DAX is of -0.6%. Euro bond markets are mixed. UK inflation was higher than expected in June, though perhaps Yesterday after the close, quarterly 13/F reports hit the tape, and the big news was that Warren Buffett’s Berkshire Hathaway upped its stake in Apple (AAPL) while reducing its position in Walmart (WMT) — seems like a big statement about Berkshire’s shift towards tech-friendliness. Retailers Home Depot (HD) and Dick’s Sporting Goods (DKS) are up on strong earnings earnings, while momo favorite Fabrinet (FN) is rising on what look like blockbuster numbers. Hot new issue Twilio (TWLO) is up premarket. I’ll discuss this more later — but I would not short this stock unless I was 100% confident that the market was set to drop sharply. Meawhile, Hain Celestial (HAIN) is getting smashed after it delayed results on accounting issues. Crude oil just broke through $46 and is hovering around there as traders continue to anticipate an OPEC output cut. We have inventory numbers coming today after the close (from the API) and tomorrow morning (EIA). On the deal front, Bloomberg is reporing that German industrial gas giant Linde is in talks to acquire Praxair (PX). SPX futures are down fractionally after showing very little movement overnight. And while the index fell for 5 straight hours into the close yesterday, there was still no volatility. Look at the chart below — that downdraft engulfed less than 4 points! We’re talking a -0.17% drop — that’s nothing. After 26 days without a 1% move in the SPX, this market could really use some excitement. We’ve got a nice chunk of economic data coming today, including CPI, Housing Starts, and Industrial Production, so maybe we’ll get the volatility bump for which we’ve been waiting. Good luck out there friends.
Continue Reading -->T3’s Take 3: Booming Oil Revs Up the Bulls
1) Crude Oil Booms on Production Cut Hopes Oil prices rose for the third straight day as traders continue to hope for a production cut at the September OPEC meeting. This morning, Russian news agency Interfax reported that OPEC may not in fact make a cut, which caused a small dip that was very quickly bought, implying that traders really do believe a cut is coming. WTI crude rose 3.0% to $45.83, while the S&P Energy ETF (XLE) rose 0.8%, making it the best performing major sector ETF. Oil service stocks and energy master limited partnerships also performed well. 2) Oil Inspiration Inspired by crude oil’s hard bounce, the S&P 500 made another all-time high today at 2193.81 before finishing at 2190.15, up 0.3% on the day. While this was the 26th straight trading day without a 1% move in the index, there were some very positive signs below the surface. The biotechnology sector put in a big gain today, and the Russell 2000significantly outperformed the S&P. We also saw notable strength in cybersecurity software, regional banks, and transports. This indicates that even with equity markets at record highs, traders are still very comfortable putting on risk. 3) More Weak Economic Numbers Post-Brexit, one pleasant surprise we’ve seen has been a pretty nice streak of positive economic data surprises. But starting with the 7/29 GDP report, we’ve seen quite a few lousy reports, culminating in today’s Empire Manufacturing miss. Individual economic data points are little more than noise. The trend is far more important. Look at this chart of the Citi US Economic Surprise Index — it is definitely sliding: For now, the weak data is being ignored. But I wonder if that changes with the avalanche of big reports coming over the next 2 days (Housing Starts, Building Permits, CPI, Industrial Production, etc.). If they’re mostly bad, the market may start caring about the numbers. In the meantime, why argue? P.S. Don’t forget to sign up for Dave Green’s FREE trading webinar. US Economics (Time Zone: EDT) 08:30 Housing Starts (Jul): exp. 1180k, prior 1189k 08:30 Housing Starts MoM (Jul): exp. -0.80%, prior 4.80% 08:30 Building Permits (Jul): exp. 1160k, prior 1153k 08:30 Building Permits MoM (Jul): exp. 0.60%, prior 1.50% 08:30 CPI MoM (Jul): exp. 0.00%, prior 0.20% 08:30 CPI Ex Food and Energy MoM (Jul): exp. 0.20%, prior 0.20% 08:30 CPI YoY (Jul): exp. 0.90%, prior 1.00% 08:30 CPI Ex Food and Energy YoY (Jul): exp. 2.30%, prior 2.30% 08:30 CPI Index NSA (Jul): exp. 240.805, prior 241.038 08:30 CPI Core Index SA (Jul): exp. 247.872, prior 247.495 08:30 Real Avg Weekly Earnings YoY (Jul): prior 1.20% 09:15 Industrial Production MoM (Jul): exp. 0.30%, prior 0.60% 09:15 Capacity Utilization (Jul): exp. 75.60%, prior 75.40% 09:15 Manufacturing (SIC) Production (Jul): exp. 0.30%, prior 0.40% 12:30 Fed’s Lockhart Speaks to Rotary Club of Knoxville Global Economics 00:30 JPY Industrial Production 09:00 CAD Existing Home Sales 16:30 NZD RBNZ Governor Wheeler Speaks in Tauranga 21:30 AUD RBA Aug. Meeting Minutes Earnings Before Open: Advance Auto Parts (AAP) Dick’s Sporting Goods (D TJX (TJX) After Close: Cree (CREE) Jack Henry JKHY) Urban Outfitters (URBN)
Continue Reading -->I Won’t Argue With the Results.. and 4 Other Thoughts on Today’s Action
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! 1) More Lousy Data Post-Brexit, one pleasant surprise we’ve seen has been a pretty nice streak of positive economic data surprises. But starting with the 7/29 GDP report, we’ve seen quite a few lousy reports, culminating in today’s Empire Manufacturing miss. Individual economic data points are little more than noise. The trend is far more important. Look at this chart of the Citi US Economic Surprise Index — it is definitely sliding. For now, the weak data is being ignored. But I wonder if that changes with the avalanche of big reports coming over the next 2 days (Housing Starts, Building Permits, CPI, Industrial Production, etc.). 2) Can’t Argue With the Results Crude oil got shaken up by this morning’s Interfax report that OPEC will not pursue an output cut at the September meeting. However, oil prices surged right back and oil stocks are outperforming the major indices. It’s probably best if traders do not expect an output cut. Last time around at the 6/2 OPEC meeting, traders came in expecting a cut and didn’t get it, and that was right near the interim top in oil. 3) Mr. Russell One common complaint the bears are throwing around is that the Russell 2000 has not confirmed the all-time highs in SPX/DJIA/NASDAQ/NDX. It would be nice if the Russell could make new all-time highs, but there’s no so such thing as a perfect bull move. Besides, the Russell is rapidly making up the difference and outperforming SPX today by a more than 2:1 ratio. 4) Bio-POWER! Biotech is back on the warpath and making its way toward IBB’s $299.49 high on 8/4. Round numbers are meaningless but I bet traders would be excited to see it make a clean move about $300. And better yet — XBI, which is more representative of the broader spectrum of biotech stock — is outperforming IBB by a big margin today. IBB makes bigger headlines, but XBI is actually more important. 5) Headline of the Day S&P 500 Dregs Stage Uprising in Bull Market That Now Makes Sense There’s something odd about declaring that the market “now makes sense” after a series of record highs, and adding that “there’s a lot to like in a market as hated as this one.” This article “feels” like the type of thing you would read towards the end of a frustrating rally — not the middle of one. That said, the bulls are putting on a good show today and again, I don’t argue with the results, even when they hurt me.
Continue Reading -->Futures Update: NDX/NQ Make All-Time Highs
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! As NDX/NQ make new all-time highs, so does ES, although that has been routine for some time. Projected risk for NQ is at 4858.50, but we could pause before that. Support is at 4818.50, the initial upside risk level is at 4834.25. GC is still holding on for dear life, thanks to a Yen bid. Resistance is at 1348.40 and 1350.90. ZN is still trading inside the NFP value area, 132’025/132’190 (shaded on chart). It’s interesting to note the confluence at 132’190 between the NFP value area high and the ten year auction VPOC (volume point of control). Remember the auction high yield of 1.503%, it could be our mean reversal level for the next few days. The caution flag for equities gets raised should ZN move back above 132’120.
Continue Reading -->The Morning Hammer: Famous Last Words?
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! Crude oil poked its head above $45 in early trading, which is giving emerging markets a pop today. China is ripping on a report saying that an exchange link between Shenzen and Hong Kong will be announced shortly, as well as takeover speculation among property developers. The DAX is up 0.4%, putting it in the green on the year for the first time. European bonds are mostly flat. SPX futures are slightly green and showing very little volatility in early action, which means today could be our 26th straight day without a 1% move in the index. And unfortunately, the economic calendar is pretty light, with the Empire Manufacturing and NAHB Housing reports coming out. Neither is likely to make a big dent in the action. However, we may finally get some action with tomorrow’s heavy calendar (CPI, industrial production, housing starts, building permits), and Wednesday’s FOMC Meeting Minutes and crude oil inventories combo. On the deal front, Mid-America Apartment Communities (MAA) is buying Post Properties (PPS) for $3.9 billion to form a REIT giant. The CBOE equity put call ratio went out at 0.55, which is right around yearly lows. The ISE Sentiment Index hit 136 Friday (136 calls for every 100 puts). This implies some near-term complacency, but we’ve had near-term complacency for quite a while now and it hasn’t mattered. It still feels like folks are waiting for “something” to happen — a news event or a good-old fashioned breakdown/breakout — to bring some life back into the market. It feels like it’s in the wings, but since so many people are thinking it, maybe we don’t get it soon. But seriously, 25 days without a 1% move? That can’t last forever. Famous last words?
Continue Reading -->Scott Redler’s Chart Attack: AAPL, BABA, NFLX
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! Check out the charts below of AAPL, BABA, and NFLX with my analysis. AAPL: See if it can hold $107.50 for a move above last week’s highs to $110-$112 resistance. BABA: Gave us a nice pre-earnings trade noth of $85 and a better options play into earnings. NFLX: Has been lagging but we saw some insider buyers. The pattern is tight and if it can clear $97-$97.75 with authority, maybe there is a trade back to $101, then $105ish. I’d use $94 as a stop. Disclosure: Scott J. Redler is long AAPL and NFLX
Continue Reading -->Scott Redler’s Morning Call Express: Summer Grind
In today’s Morning Call Express, T3 Live Chief Strategic Officer breaks down the action in FXI, EWG, and SPX, as well as individual stocks like AAPL and BABA.
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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