T3’s Take 3: Biotech Rocks on Deal Chatter
Try this hot market… Tons of stock and options traders are switching to this exciting, lucrative market. Click here to learn more 1) New iPhone Day! Apple (AAPL) held a new product launch event today, unveiling the iPhone 7 and 7 Plus smartphones, plus an updated Watch. The iPhone 7 line features water and dust protection, plus faster processors and enhanced camera features. In a somewhat controversial move, Apple also removed the headphone jack from the iPhone, paving the way for an all-new wireless audio interface. While Apple didn’t make any Earth-shattering announcements, iPhone fans seemed generally pleased with the new feature set, and Apple shares rose 0.6% to $108.36, outpacing the broader markets. 2) Biotech Rips on Deal Chatter Biotech was lackluster for most of the day, but slammed up into the close on takeover rumors. This afternoon, Reuters reported that hot biotech/marijuana play GW Pharma (GWPH) hired advisers after receiving takeover interest. GWPH closed up 23.6% to $104.03, and in turn, the Nasdaq Biotech ETF (IBB) rose 0.7% to $286.10, making it one of the best-performing sector ETFs. Curiously, this morning, some very “lucky” trader bought 380 February $100 GWPH calls at $4.20: Those calls closed at $12.66. That’s what I call good timing… 3) YAWN! Traders are still falling asleep as the S&P 500 fell -0.01% to 2186.16, with the VIX falling back under 12. We haven’t had a 1% S&P move since July 8, and we haven’t had a 1% down day since June 27. On the plus side, we saw some very bullish action below the surface. Aside from the big biotech bounce, small caps were very strong, with the Russell 2000 rising 0.6%. Regional banks also bounced hard, and crude oil rose after the close on a very bullish inventory report from the American Petroleum Institute. Thursday’s Trading Calendar US Economics (Time Zone: EDT) 08:30 Initial Jobless Claims (9/3): exp. 265k, prior 263k 08:30 Continuing Claims (8/27): exp. 2151k, prior 2159k 08:45 Bloomberg Sept. United States Economic Survey 09:45 Bloomberg Consumer Comfort (9/4): prior 43.4 10:30 EIA Natural Gas Storage Change (9/2): exp. 42, prior 51 10:30 EIA Working Natural Gas Implied Flow (9/2): exp. 42, prior 51 11:00 DOE U.S. Crude Oil Inventories (9/2): exp. 905k, prior 2276k 11:00 DOE Cushing OK Crude Inventory (9/2): exp. 100k, prior -1039k 11:00 DOE U.S. Gasoline Inventories (9/2): exp. -750k, prior -691k 11:00 DOE U.S. Distillate Inventory (9/2): exp. 1150k, prior 1496k 11:00 DOE U.S. Refinery Utilization (9/2): exp. -0.40%, prior 0.30% 11:00 DOE Crude Oil Implied Demand (9/2): prior 17080 11:00 DOE Gasoline Implied Demand (9/2): prior 10060.4 11:00 DOE Distillate Implied Demand (9/2): prior 4887.3 15:00 Consumer Credit (Jul): exp. $16.000b, prior $12.320b Global Economics 07:45 EUR Minimum Bid Rate 08:30 EUR ECB Press Conference 08:30 CAD Building Permits m/m 12:20 CAD Gov Council Member Lane Speaks 21:30 CNY CPI y/y 21:30 CNY PPI y/y Earnings Before Open: Barnes & Noble (BKS) Conn’s Inc (CONN) After Close: Finisar Corp (FNSR) Restoration Hardware (RH) Zumiez (ZUMZ)
Continue Reading -->Why the Fed Is a Total Mystery Right Now
As US economic data has generally slumped as of late, traders have pulled back on their rate hike expectations relative to last week. You can see the trend in this chart plotting implied Fed rate hike odds for each of the next 5 FOMC rate decisions: Traders are now pricing in a 48.8% chance of a December rate hike, down from about 60% last week. That means we’re right back to being split down the middle. Some traders were also thinking the September 21 meeting was “live.” Now it looks like that’s off the table, as a mere 20% probability is being priced in. Unfortunately, we may not get much clarity soon. This week’s US economic calendar is pretty much empty. The next big releases are the August retail sales report next Thursday 9/15 (plus industrial production that day), and August CPI on Friday 9/16. And there isn’t much else between those reports and the next FOMC rate decision on September 21. So what else do we have to look at? Well, we have Fed officials Rosengren, Kaplan, Lockhart, and Kashkari out chattering over the next week. But only Rosengren is a current voting member of the FOMC. And besides, it’s getting harder and harder to reconcile all the hawkish chatter with the concurrent decline in US economic data. Check out this chart of the Citi US Economic Surprise Index, which measures economic data relative to expectations. The trend turned down hard with the weak Q2 GDP report on July 29, and it’s looking pretty sorry.
Continue Reading -->Morning Call Express: Beta Time!
In today’s Morning Call Express, Scott Redler looks at the SPX and how yesterday’s action plays into his overall plan. With the AAPL event today, he also looks at the chart of AAPL and provides some techincal levels to keep an eye on for trading. He also looks at some high beta tech names as well that remain on his radar.
Continue Reading -->The Morning Hammer: Maybe the Fed Went Too Far
One key trend we’ve been pointing out here again and again has been the degrading trend in US economic data, culminating in yesterday’s trio of misses. Now all of a sudden, the market’s thinking that maybe the Fed went too far in pushing its rate hike case because we’ve seen such lousy data as of late. Traders are now pricing in a 52% chance of a December rate hike, down from 60% last week. September odds are down to 24% from 34% last week. Gold has been on a rampage while the dollar’s taking heat. Equities of course, are still going nowhere. SPX volatility is at a near 2-year low. We haven’t had a 1% SPX move since July 8, and we haven’t had a 1% down down day since June 27. I’m long VIX calls, so I have good reason to be bitter. But I’m also just plain bored out of my mind. Individual stocks are moving around nicely, but I’d love to see a little excitement in the broader indices. Chipotle (CMG) is up this morning on news that Bill Ackman’s Pershing Square took a 9.9% position. Ackman’s going after the board to shake things up. Grovery chain Sprouts Farmers Market (SFM) cut its earnings outlook on competitive pressures and ongoings deflation. Whole Foods (WFM) is down in sympathy with it, The economic calendar is pretty light with no market-moving reports, so it looks like we’ll be in a holding pattern today ahead of tomorrow morning’s ECB rate decision. Good luck… staying awake, that is.
Continue Reading -->5 Reasons the $5 Trillion Forex Market Might Be Right for You
For some strange reason, many people think trading forex isn’t for them. But forex is way simpler than you think, and it offers 5 huge advantages over stock, options, commodities, and futures trading: 1) It’s Practically a 24/7 Market Forex is a global market and is open 24 hours a day from 5:00 p.m. ET Sunday through 5:00 p.m. ET on Friday. This is perfect for traders with flexible schedules, or for those making more money outside standard standard exchange hours. 2) Unmatched Liquidity Since forex is a $5 trillion dollar per day market with expanded hours, there are also virtually no gaps, effectively bridging the gap (no pun intended) between day and swing trading. It is very easy to get in and out, at will, no matter the time, day or night. 3) You Can Short At Will Nowadays, there are many restrictions put on stock trading, the uptick rule for one. With forex, there are no limitations on the currencies you trade. You can short at will. 4) Trading Costs Are Incredibly Low Most forex accounts are commission free. PLUS, there are no exchange, data, or platform fees. The only cost you have as a forex trader is the spread, or difference between the bid and ask, which is always visible for you to see. That makes forex trading much, much cheaper than stocks, options, and futures. 5) Incredible Leverage Because the forex market is so liquid, brokers will extend you significant leverage — up to 50:1, and even higher outside the US). Leverage goes both ways though. Just as easily as you can accelerate profits, you can also suffer accelerated losses. That is why you MUST have a method and plan! P.S. below is a recent FREE webinar I did…check it out!!
Continue Reading -->T3’s Take 3: Did the Fed Go Too Far?
Join This Week’s Training Sessions! They’re FREE! STARTING NOW!: Day and Swing Trading Signals You Need to Know Thursday 9/8: How to Start Trading Forex Like a Pro ******** 1) Did the Fed Go Too Far? If you’ve been following financial markets in any serious way, than you know that Fed officials, including FOMC Chair Janet Yellen, have been out in force getting the market ready for rate hikes. I now wonder if they went too far. Today, we saw disappointing Labor Market Conditions, ISM Services, and IBD/Tipp Economic Optimism. These were just the latest in a string of disappointing US economic data. Here is a chart of the Citi US Economic Surprise Index, which measures the strength of economic data relative to market expectations: As you can see, the trend turned decisively down in late July, when a disappointing second-quarter GDP report was released. Now, traders are pricing in a 51% chance of a December rate hike, down from 60% on Friday. 2) Gold Screams! With traders losing faith in the Fed’s willingness to raise rates, precious metals put in a repeat performance of Friday’s post-NFP rip. Gold rose 2.0% to $1353.90/oz, while the gold miners ETF (GDX) rose 4.4% to $28.56. Meanwhile, the US dollar fell hard against the yen and euro, and my colleague Kurt Capra is making the case that the dollar weakness could continue. I’d also consider reading Jeff Cooper’s recent work on gold. 3) Stocks: More of the Same The S&P 500 hasn’t made a 1% move since July 8, and today was more of the same. We still see pockets of volatility in areas like precious metals, biotechnology, and energy, but the broader markets are still going nowhere. The S&P rose 0.2% to 2173.81, with the Nasdaq doing slightly better due to strong action in biotech. Perhaps we’ll see some movement on Thursday, which has both the European Central Bank rate decision and US crude oil inventories. But with volatility at 2-year lows, I’m not holding my breath! Wednesday’s Trading Calendar US Economics (Time Zone: EDT) 07:00 MBA Mortgage Applications (9/2): 2.80% 10:00 Fed’s Lacker and George Appear before House Financial Panel 10:00 JOLTS Job Openings (Jul): 5625 5624 12:00 DOE Short-Term Crude Outlook (Sep): 51.58 12:00 DOE Short-Term Mogas Outlook (Sep): 2.26 12:00 DOE Short-Term Diesel Outlook (Sep): 2.7 12:00 DOE Short-Term Ht Oil Outlook (Sep): 2.6 12:00 DOE Short-Term NatGas Outlook (Sep): 10.66 14:00 U.S. Federal Reserve Releases Beige Book Global Economics 03:00 CHF Foreign Currency Reserves 03:30 GBP Halifax HPI m/m 04:30 GBP Manufacturing Production m/m 09:15 GBP Inflation Report Hearings 10:00 CAD BOC Rate Statement 19:50 JPY Final GDP q/q 21:30 AUD Trade Balance Earnings Before Open: None of Significance After Close: FuelCell Energy (FCEL)
Continue Reading -->Morning Hammer: 40 Days and 40 Nights
Join This Week’s Training Sessions! They’re FREE! Tuesday 9/6: Day and Swing Trading Signals You Need to Know Thursday 9/8: How to Start Trading Forex Like a Pro ********* Labor Day was not a cure for the summer snoozefest. SPX futures are flat as an ironing board as we come off 40 trading days without a 1% move in the S&P 500. And it’s been 48 days since the last 1% down day, which happened on June 27 after the Brexit. Overnight, German factory orders missed, while Swiss GDP and euro-area exports strengthened. Australia’s central bank held steady on interest rates as expected. Europe is slightly green, though it may remain in a holding pattern until the ECB rate decision on Thursday. Crude oil popped yesterday on news that Saudi Arabia would make a “significant” statement on the oil market. However, they did not announce any changes to output. Iran said it will support efforts to stabilize markets, but will not necessarily participate in a coordinated production freeze. Saudi Arabia’s energy minister also said there is no need to freeze output just yet. Gold is extending Friday’s gains on the slightly weaker-than-expected NFP report. Market perception of Fed rate hikes haven’t changed as much — this looks more like a relief rally after a hard decline. Traders are pricing in a 59% chance of a December rate hike, which isn’t much of a chance from Friday’s 60%-ish levels. In deal news, pipeline/storage giant Enbride (ENB) is buying Spectra Energy (SE) in a $28 billion transaction, creating the largest MLP in North America. On today’s economic calendar, we have the Labor Market Conditions Index and ISM Services numbers on tap. The Fed’s Williams (non-voter) will be speaking at 9:15 p.m. ET. Things don’t really pick up until next week, when we have retail sales and CPI. One trend worth watching is the degradation of US economic data starting with the weak GDP report in late July. Check out this chart of the Citi US Economic Surprise Index, which measures economic data strength relative to market expectations: It’s clearly sliding lower. The Fed always calls itself “data dependent,” which gives them a convenient back door. If the data continues to slip, maybe folks will start pricing in a smaller chance of a rate hike, or at least become convinced that the Fed is one and done. P.S. Check out our FREE webinars and learn from our top traders!
Continue Reading -->Morning Call Express: Back From The Beach
In today’s Morning Call Express, Scott Redler talks about the key levels on the SPX for both support and resistance. He also looked at the charts of USO, AAPL, BABA, TWLO, as well as others.
Continue Reading -->T3’s Take 3: Gold Screams on NFP Miss
Join Next Week’s Training Sessions! They’re FREE! Tuesday 9/6: Day and Swing Trading Signals You Need to Know Thursday 9/8: How to Start Trading Forex Like a Pro ********* By Michael Comeau 1) NFP Miss Today we got the big bad August nonfarm payrolls report, and unfortunately, it disappointed. The 151K headline number missed expectations by 29K, and unemployment came in below consensus. And perhaps most importantly, average hourly earnings rose just 0.1% month-over-month, missing the 0.2% consensus. The Fed doesn’t make decisions based on a single data point, but watch the trend: US economic data has been on a downtrend as of late, as you can see in this chart of the Citi US Economic Surprise Index: 2) Gold Rocks – But Has Anything Changed? Gold had been selling off since mid-August on an endless stream of hawkish comments from Fed officials. However, with today’s NFP miss, traders decided to once again buy what now looks like an oversold dip. Gold rose 0.9% to $1329/oz and the gold miners ETF (GDX) rallied an impressive 3.6%, putting it up 7.3% in 2 days. However, the rally in gold does not imply that traders believe the Fed will go on hold. The US dollar was remarkably strong today after an early dip, and US Treasury yields rose. The dollar and yields tend to go up when traders believe the Fed will raise rates. 3) Bulls Fight Back In recent days, tension clearly appeared on the tape, but today’s NFP miss wasn’t bad enough to derail the bull. The S&P 500 rose 0.4% to 2179.98, while the Russell 2000 rose an impressive 1.0%. And much to my chagrin, the VIX fell 11.4% to 11.95. Regional banks were strong again, and we also saw a nice intraday rally in large-cap tech names, with Apple (AAPL) pushing up 0.9% to $107.76. On the downside, biotech (IBB) fell on Presidential Candidate Hillary Clinton’s drug pricing plan, which is aimed at curbing “unjustified” drug price hikes. P.S. Don’t forget to check out our FREE trader training sessions.
Continue Reading -->5 Thoughts on the Disappointing August Jobs Report
Now that we’re past the initial reaction to the weaker-than-expected August NFP report, let’s take an in-depth look at how the market’s doing: 1) Oil Wins! Oil is the big winner off the NFP report. WTI crude was red in the early going, but it’s now up 2.4%, and the Vaneck Vectors Oil Service ETF (OIH) is up 1.4%. And XLE is the best performing S&P sector ETF with a 1.1% gain. Plus, this is happening despite a major currency move… 2) Impressive Dollar USDJPY dropped to 102.811 post-NFP, but it’s rocketed up to 104.176. This really surprised me. I thought the light numbers would result in profit-taking, but I guess traders are happy to keep riding this freight train to the moon. This, along with the big selloff in bonds, is helping banks, especially the regionals. By the way, do you want to learn to trade forex? Sign up for next week’s FREE webinar. 3) Miners Rock Even with the dollar strength, gold is up 0.4% on the NFP miss. And the gold miners (GDX) are having a great day with a 1.9% pop following yesterday’s solid gain — wow. But remember, GDX just dropped from $31.79 on August 12 to $25.17 yesterday, so the pendulum had to eventually swing back the other way. 4) Rate Hike Odds Fed rate hike odds are essentially unchanged. Fed funds futures imply a 30% chance of a September rate hike, down from 34% yesterday. But December is holding steady at 60%. Traders will probably wait to see September numbers before really freaking out over employment data. 5) Fed Heads Fed officials will immediately continue their press tours, and there’s a chance they’ll comment on today’s jobs numbers. Lacker will be speaking in Richmond today at 1:00 p.m. ET And we have Williams next Tuesday and Rosengren next Friday. Only Rosengren is a voting member of the FOMC. The economic calendar is pretty light next week, so maybe these folks will get even more attention than usual, especially if they get feisty. P.S. Check out our FREE webinars and learn from our top traders!
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