Scott Redler’s Morning Call Express: Earnings Hump
In today’s Morning Call Express, T3 Live Chief Strategic Officer Scott Redler breaks down the action in SPX and IBB, as well as individual names like NFLX, GOOGL, and AAPL.
Continue Reading -->Scott Redler’s Morning Call Express: Earnings Central
In today’s Morning Call Express, T3 Live Chief Strategic Officer Scott Redler breaks down the early earnings season action.
Continue Reading -->Traders Don’t Get Much More Neutral Than This!
Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. Neither side provides evidence for their views. So I like regularly run through a wide variety of sentiment measures to get an accurate reflection of the market’s mood. According to 7 sentiment measures I track, traders appear to be very, very neutral, even though the S&P 500 is still within a stone’s throw of the 2193 all-time high. 1) SPX Options Prices – Bearish SPX options prices show a high put skew. I looked at 10% out of the money 6 month SPX options. There is currently a 9.6 point skew in implied volatilities on the options. That’s the 86th percentile. So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 86% of the time over the past 5 years. 2) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 25.5% of individual investors are bullish, well below the long-term average of 38.5%. But what’s really interesting is that bullishness has been below the long-term 38.5% average for 49 straight weeks! 3) ISE Sentiment – Neutral The ISE Sentiment Index closed at 65 yesterday (81 puts for every 100 calls). And its 10 day moving average is just 101 — a level that indicates a neutral mood. 4) Wall Street Strategists – Neutral The average year-end target price for the S&P 500 is 2171, according to Bloomberg. That implies the market rises 1% into year-end. YAWN! 5) CBOE Equity Put-Call – Neutral The CBOE Equity-Put Call ratio was 0.66 yesterday, which is just below the YTD average of 0.69. This points to neutral sentiment. 6) CNN Fear & Greed Index – Neutral The Fear & Greed Index is at 48. F&G operates on a 1-100 scale, and 50 is neutral. So it’s basically right in the middle. 7) Investors Intelligence – Bullish Yesterday, the Investors Intelligence Survey of newsletter writers showed a slight decrease in bullishness to 46.1%. This is still a positive reading. ********* So we have 2 bearish indicators, 4 neutral indicators, and 1 bullish indicator. Blend them together and you have a moderately bearish crowd. I’m hearing a lot of bears say that everyone’s complacent… but I just don’t see it.
Continue Reading -->The Truth About the Brexit: It’s All in the Charts
Want to know the truth about the Brexit? Look at the charts. We didn’t hear much about the GBPUSD since the Brexit decision… and then there was the pound’s flash crash. Now that the GBPUSD is really moving, we’re seeing countless headlines about economic uncertainty and political instability and central banks gone wild. But does all this explaining — after the fact — help us make money? Nope… The right question to ask is how could we have seen the pound’s collapse coming? And how could we capitalize on it? If we are always waiting for news and the next story to drop, by definition, we will always get left behind… similar to a reporter that’s last to the scene. In most cases, the answer is right in front of you. Just look at the charts. People lie. But charts tell the truth. With the charts, you will see the story before it hits the front page. The GBPUSD is a great example of this truth. Post-Brexit, the GBPUSD was in a sideways range for several months. Most people wrote it off, looking for other opportunities. But the pound remained in a downtrend throughout the entire sideways move. This told us to be bearish overall. To see that, look no further than the weekly chart below. If any traders were fortunate enough to see the action prior to the breakdown, they probably would not have pulled the trigger. Why? Because every other time it tested the lows, it rallied. So why should this time be any different? This is where your ability to ‘listen’ to what the chart is saying becomes so crucial. Look at this daily chart. I have highlighted the three main pivot lows. What happened prior to the breakdown was the key. The first two pivots pushed up relatively easily. When GBPUSD came down for the third time, it struggled multiple times to move up. In other words, supply was increasing and demand was decreasing. And for the first time, price was staying below the moving averages. This told us GBPUSD was getting close to making a move. And once it broke down, that was the time to act. This was the story: fear overcoming greed. Not a slowdown in the UK or negotiations with the EU. Humans love stories. We always want to know why. But does why matter as much as when… and how much? I think not. I’d love to hear your thoughts on this. Email me at kurt@t3live.com.
Continue Reading -->Morning Call Express: A Leveled Approach
In today’s Morning Call Express, Scott Redler talks about some of the talking points that has the SPX futures down this morning. He also offers one of the rules he follows to determine what trading style to implement. Scott also looks at the QQQ and Biotech Index and provides additional insight into the current state of the markets.
Continue Reading -->The Morning Hammer: Those That Know Don’t Tell…
Options > Dividends Find out more at our FREE training event… ******** The pound is rallying after UK PM Theresa May said that Parliament should vote on her Brexit plan. This implies a more deliberate approach to the UK leaving the building, which could soften the Brexit blow a bit. Crude oil popped above $51 after OPEC said it has a firm commitment from Russia to participate in an output cut. However, keep in mind that the oil newsflow is all over the place, and this story is truly not over until it’s over. (you know what I mean) As an illustration of how fluid the situation is, Bloomberg is reporting that Venezuela and Iraq are disputing OPEC’s reported output data. I assume that having no consensus on where output is now makes it more difficult to decide on where output should be. Meanwhile Goldman Sachs is out saying US oil explorers will boost activity with oil in the $50 – $55 range. I don’t think the market disagrees with that, given that oil service names (OIH) have already rallied nearly 50% off February lows. Samsung cut its Q3 operating profit forecast by $2.3 billion after halting production of the Galaxy Note 7, which is prone to catch fire. The big item on today’s agenda is the release of the September Fed Minutes at 2:00 p.m. ET. Even with Friday’s mediocre jobs numbers and the Fed’s mixed message in the September rate decision, traders have been upping their bets on a December rate hike. Fed Funds futures are pricing in a 67% chance of a December rate hike, up from 62% at the September rate decision. Of course, the big question isn’t necessarily “what will the Fed do in December?” It’s “how fast is the pace thereafter?” Remember, at the September meeting, the Fed cut its own forecast for 2017 rate hikes to 2, down from 3 previously. Some very smart people think there’s a decent chance the Fed is one and done due to recession risk. I won’t hazard any guesses. I’ll just remind you of the 2 simple truths of Fed days: 1) Those who know don’t tell and those who tell don’t know 2) The first reaction isn’t always the right one… and neither is the second The hawk hammer has the dollar moving higher again this morning, while SPX futures are slightly red. Yesterday, we had a nasty down day on a confluence of bad news (huge currency volatility, AA/DOV earnings, Samsung), and there was a clear risk-off flavor to the action. The Russell 2000 and biotech (IBB) took huge lumps, and the VIX popped pretty hard. I’d key off 4 things today: 1) Apple (AAPL) Apple’s gotten a nice boost from Samsung’s Note 7 recall, which eliminates one of iPhone 7’s main competitors. Apple does a lot of heavy lifting for the indices, so I’d watch to see if there is some belated profit-taking. 2) Oil Clearly, equities like strong oil. And WTI crude looks like it wants to take out the 2016 high at $51.67. A power move through there could mean good things for the bulls. 3) Hot New Issues ACIA, TWLO, TTD, ACIU, PI, etc. are the new F.A.N.G. These names are not looking healthy. It would be a clear plus if they regained traction. 4) The Usual Risk On/Off Suspects As I said, the Russell and biotech got spanked pretty hard yesterday. I’d closely watch them, along with HYG. And remember… The Fed Minutes release means it’s an anything goes day. Good luck out there. P.S. Don’t forget to sign up for Doug Robertson’s special options training session!
Continue Reading -->Morning Call Express: The Anatomy of a Turnaround Tuesday
In today’s Morning Call Express, Rob Smith looks back at what happen yesterday and how it has changed the charts. He also looks at various individual names and sectors to provide additional color into the selloff we saw on Tuesday.
Continue Reading -->Morning Call Express: AAPL Picking
In today’s Morning Call Express, Scott Redler talks about how to navigate the current range and what levels to be looking at to trade around or, if nothing else, be aware of them. He also talks about AAPL, his recent trade in it, and where to look for it move heading forward. Scott also looks at some individual names.
Continue Reading -->Morning Call Express: Elections & Markets For Debate
In today’s Morning Call Express, Scott Redler covers the current range in the market, ahead of earnings season, and the levels to be looking at for clues. He also looks at a couple sectors, banks, high beta tech, and a few new issues.
Continue Reading -->The Morning Hammer: Post-Debate Happiness
The Mexican peso is up 1.7% this morning, which means Mr. Market thinks Hillary Clinton won last night’s steel cage match US Presidental debate. Meanwhile, the pound sterling is still falling in the wake of Friday’s flash crash. Crude oil is rising after Saudi Arabia’s energy minister said crude could hit $60 by year-end. OPEC recently announced a production cut, though market participants would certainly like more detail. European equities are up for the first time in 4 days on strength in automakers, throuhg banks are still looking weak. Deutsche Bank (DB) failed to announce a deal with the Department of Justice as some traders expected. China resumed trading after a week-long holiday, and the yuan dropped to a fresh 6-year low. Goldman Sachs says that US and European markets could stumble a bit into year-end due to political risks, a weak economy in Europe, and high stock prices in the US. The US dollar is still in bull market mode despite Friday’s slightly soft jobs report. Traders are pricing in a 64% probability of a December rate hike, though keep in mind, the pace thereafter what matters. According to some very smart folks I’ve spoken with, there’s an excellent chance the Fed is one and done. However, gold is catching a bid today, so I’d watch for a pop in the beaten down gold miners (GDX). Apple (AAPL) is up fractionally this morning on news reports that Samsung temporarily stopped production of its Galaxy Note 7 smartphone. The device was already recalled, but even replacement models are catching fire, which is a PR disaster. SPX futures are up about 11 handles this morning, so we’re starting the week off on a positive note. Biotech is catching a bid this morning — it’s been lagging to see if the weak trend breaks.
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