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Some Reprieve?
Submitted by Nic Lenoir of ICAP
The day started with risk being sold, as Greece's bonds were under pressure, and so were european equities taking US markets with them. However, positive news on AAPL front and the Federal Reserve announcement turned the tables around. We had highlighted that we expected a rebound in S&P between 1,105 and 1,108, and it is worth noting that even with the turmoil this AM we barely made new lows, clearly showing there is a decent amount of bullish divergence. We would wait for the rebound to reach 1,108 to consider selling again, especially since we came close to channel support as well as highlighted on the daily chart.
With risk under pressure, the USD was strong and commodities were weak. Copper seems to have broken the bullish channel in place since March 2009. However, Gold is coming relatively close to support here, and EURUSD is showing some bullish divergence. We also have met the target at 1.4008, so we would expect a rebound to test the 50DMA which was our sell trigger back at 1.4870. We would trim positions or close shorts here waiting for the bounce to reinitiate. There were conflicted reports of stops and bids below 1.40, but sofar the market has held. It will be interesting to see how Copper evolves given that it paints a more bearish picture than Gold and EURUSD.
Finally a word on rates, our resistance in 10Y futures at 118-10 has been respected and we would expect to at least retest 117 on the downside here. We saw some flow in mid-curve Eurodollar options as traders took positions to benefit from a sell-off in Fixed Income.
Good luck trading,
Nic
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That's not even 1% above today's close. I would hardly constitute that level to be a 'rebound'. In other words, if that's the alleged ceiling, we're pretty much there already...
Stay long stocks/Long energy (especially solars)/Long commodities/Long USD/ Long CAD vs EUR and short GOLD. Watch what will happen after next Friday's big US employment report. Buy any dip on stocks from now until then. Robo, where are you?
I think ur right about USD trade but cannot justify higher equities w/o weak USD. Risk trade missing major components (Gold and USD). That's the picture especially in light of poor response to 4Q09 EPS. Stock vision trouble ahead. UE report will shake-em up!
Long stocks due to inflation alone. no fundamental reason why else. Solars (TSL) just got shorted so buy. Long doelarr? hell no! DXY to 82 at the highest. short gold? go ahead, there are buyers. Buy the dip...buy silver.
Oh bleah, just caveat emptor.
If you want more stocks, I'll be happy to sell you some. Give me a minute to borrow some from my friendly broker.
Doe anyone have a sense that equities are in a "win win stance" vs USD either direction? I'd suspect not and that the S&P shatters new ST lows unless there's a belief the carry tyrade has life. Anyone?
Traders look at these charts and hear the news about Greece and say Who gives a flying fuck. I'm getting in on this before it gets away. Their mentality is , I'm buying this stock. Fuck Greece, fuck the Asset bubble. They press the buy button on their Etrade account and wala, Done deal.
What happened to the robot, his articles and pics are why I come here every day. Did China get to him too? lol
Not much in the way of conviction selling on the futures side. You know I was looking at the continuous chart in the futures and we have only spent about 15 days below the 50 day MA since we hit bottom.
GDP friday likely takes us right back to the 50...
i basically agree. ill start buying if the unable to move past 20 day though.
AAPL, one of the few stocks yet to be shorted. soon steve jobs takes profits, we just need more sucka buyers!
Really? You really think AAPL's "good" news about a strangely named table was a catalyst for turning the market around?? Wow, that's pretty sad.
r u kidding? This market is defined by stupidity. All that was talked about on Bloomberg was Apple. Apple this, Apple that. The collective juices will ride that pony until they look back and exclaim how obvious it was that the market was grossly overvalued.
Apple? Really? How can you seriously think AAPL introducing some strangely-named websurfing device actually helped turn the market around? Wow, that's a stretch.
But it's a magic tablet. The god's have delivered cargo. There will never be need and want again until there is new cargo. A chance to throw out the old unsatisfying cutom and embrace the new more satisfying custom. Wear you're lucky underwear. Etch a sketch just got sexy.
http://www.27bslash6.com/jason.html
This looks a lot like Nov. retracement to 50 day MA, then another leg up. Buy Sunday open futures since over 80% of all gains since March occur on Mondays (alot at the openning based on Sunday Globex trading). Consider the big picture with the USA/China partnership controlling the action. As long a China holds over $4 Trillion in FX dollar reserves and links currencies they will support any and all Treasury auctions. China gains alot in the partnership and has a lot to lose if it breaks down. This market will move higher this year albeit at a slower pace. Going short at 1105 may work for a short term trade (like 5 minutes). Employment numbers will improve this year triggering a rally.
Can you please tell me who is hiring?
Looking for top tick. Great shorting opportunity.
A DOW/SP500 counter trend rally started on Wed 27th: aka a dead cat bounce.
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