GLOBEX:@ESU9 tonight and tomorrow
R2=921
R1=913
Pivot=906
S1=898
S2=891
Today made it three days down in a row, as the S&P 500 Index ($SPX) registered yet another 10-day low.
We had a slightly higher open this morning after two sessions’ 3-digit loss. Es was traded at 906.75 at the opening. But it didn’t find any follow through to the upside and down to 903 in half an hour with crude oil crashed down $70. The market responded to the 10:30AM Oil inventory reports which showed a larger draw-down for oil inventories but a much greater build in gasoline inventories and accelerated dropping. By 10:45AM, es was below 900 with tick over -1000. Crude oil dived to $69. After that, the market whipsawed and climbed back to test high 914.25 which was slightly above pivot point at 2PM, then started to orderly sell-off and closed flat at 906. Basically , in one word, The markets had shot both ways today and are sitting on the flat line. Tech is stronger today while financial stocks are weaker. Commodities are lagging although Crude oil finished higher at $71 today. There was also some pressure on US dollar and treasury Bonds too.
Technically speaking, there was no change or significant shift in support/resistance from yesterday. From more details, check Wen’s yesterday report. The SPX is between 200-day MA and 20-day support. The Nasdaq maintained 20-day MA support and has an opportunity to bounce. The Russell 2000 held rising support but is trapped between 200-day and 20-day MA.
One interesting thing is VIX, normally when indices drop, the vix is higher. Maybe because it is OE, It dropped along with the SPX. I remember that Cobra has some statitics before. The next day the chance of the market close higher increases. But don't trade based upon this. Just some FYI.
From intraday charts such as 5 min/15 min, we see some positive divergence. They might play out tomorrow morning.
I saw people ask about "Dollar/BONDs/Commodities" relationship. Here is some information from John Murphy:
"June has been a different story. Stocks, commodities and gold are down this month, while the US Dollar and bonds are up. We can use some reverse logic for the rational. Obviously, the bounce in the Dollar weighed on commodities and gold. Commodities, in particular oil, were also getting overbought and ripe for a pullback. The greenback was also getting oversold after the March-May plung and ripe for a bounce. Bonds were also quite oversold and ripe for a bounce, which they got over the last five days. In fact, the current five day advance in the 20+ Year Treasury ETF (TLT) is the sharpest since December. The sharp decline in stocks also pushed some money toward the bond market. We should keep an eye on these relationships for clues on future performance. It appears that stocks, commodities and gold are positively correlated to each other, but negatively correlated with the Dollar and bonds. Therefore, further strength in the Dollar and bonds could weigh on stocks, commodities and gold."
Tomorrow's event:
Jun 18 8:30 AM Initial Claims NA Medium
Jun 18 10:00 AM Leading Indicators 0.9% Medium
Jun 18 10:00 AM Philadelphia Fed -16.4 Medium
My personal opinion? ES should try 920 at least..
R2=921
R1=913
Pivot=906
S1=898
S2=891
Today made it three days down in a row, as the S&P 500 Index ($SPX) registered yet another 10-day low.
We had a slightly higher open this morning after two sessions’ 3-digit loss. Es was traded at 906.75 at the opening. But it didn’t find any follow through to the upside and down to 903 in half an hour with crude oil crashed down $70. The market responded to the 10:30AM Oil inventory reports which showed a larger draw-down for oil inventories but a much greater build in gasoline inventories and accelerated dropping. By 10:45AM, es was below 900 with tick over -1000. Crude oil dived to $69. After that, the market whipsawed and climbed back to test high 914.25 which was slightly above pivot point at 2PM, then started to orderly sell-off and closed flat at 906. Basically , in one word, The markets had shot both ways today and are sitting on the flat line. Tech is stronger today while financial stocks are weaker. Commodities are lagging although Crude oil finished higher at $71 today. There was also some pressure on US dollar and treasury Bonds too.
Technically speaking, there was no change or significant shift in support/resistance from yesterday. From more details, check Wen’s yesterday report. The SPX is between 200-day MA and 20-day support. The Nasdaq maintained 20-day MA support and has an opportunity to bounce. The Russell 2000 held rising support but is trapped between 200-day and 20-day MA.
One interesting thing is VIX, normally when indices drop, the vix is higher. Maybe because it is OE, It dropped along with the SPX. I remember that Cobra has some statitics before. The next day the chance of the market close higher increases. But don't trade based upon this. Just some FYI.
From intraday charts such as 5 min/15 min, we see some positive divergence. They might play out tomorrow morning.
I saw people ask about "Dollar/BONDs/Commodities" relationship. Here is some information from John Murphy:
"June has been a different story. Stocks, commodities and gold are down this month, while the US Dollar and bonds are up. We can use some reverse logic for the rational. Obviously, the bounce in the Dollar weighed on commodities and gold. Commodities, in particular oil, were also getting overbought and ripe for a pullback. The greenback was also getting oversold after the March-May plung and ripe for a bounce. Bonds were also quite oversold and ripe for a bounce, which they got over the last five days. In fact, the current five day advance in the 20+ Year Treasury ETF (TLT) is the sharpest since December. The sharp decline in stocks also pushed some money toward the bond market. We should keep an eye on these relationships for clues on future performance. It appears that stocks, commodities and gold are positively correlated to each other, but negatively correlated with the Dollar and bonds. Therefore, further strength in the Dollar and bonds could weigh on stocks, commodities and gold."
Tomorrow's event:
Jun 18 8:30 AM Initial Claims NA Medium
Jun 18 10:00 AM Leading Indicators 0.9% Medium
Jun 18 10:00 AM Philadelphia Fed -16.4 Medium
My personal opinion? ES should try 920 at least..
Thanks Wahaa for nice report:
Same as I posted in blog during the day, The only chart I want to talk about is this spx chart (I also posted in HT) SPX-5min3
Here is how I read this chart
Here is how I read this chart
(1) The impulsive (clear 5 wave structure) move from 956.23 to 903.78 tells me it is possible that upside bounce from March low of 666 is completed. [B] is done. If wave [B] is done, then we are in minor wave 1 of major down wave [C]. within minor wave 1, we are in mini wave 4. if this count is correct, then we should not see the bounce pass 935.
(2) Everytime when SPX breaks its key support lines, It did a back test, it did that on 945, 930, 920. So if we do see SPX breaks down heading to next major support 880, it is likely will back test 900 as a final kiss-bye-bye (last chance to exit 401K longs)
(3) Black thin lines form a wedge and a channel, The wedge is broken, The channel is not. That is why I keep saying the 900 mark on spx is very important. Break down below 900 breaks this up trend channel with measured target 880.
(4) Both blue and red fork marks important support and resistance zone, as you can see the first touch of this layer of support bounced back. If I count this mini wave 4 as abc, then the c of 4 should be around 920-930. BUT I added a Green line here, without pass 915 tomorrow, there is no way SPX can go 920+, so that is the first thing we need look for confirmation tomorrow. If SPX fails to pass 915, then the mini 3 is NOT done. and likely OE will be between the green line and 900. If that is true, then after OE, the bounce will be the mini wave 4.
(5) Notice every 5 points move above now has the resistance: 910, 915, 920, 925, 930, 940, 945, only if SPX can pass 950, will invalidate the current count here.
(6) Operation: I will start position short/put from 920 if it hits there. I will add short/put for every 5 points SPX move up. (all set to 945 as reference stop point). I will chase shorts (long SDS, SKF, SRS, etc) if SPX breaks down below 900 before break above 915. I will cover around 880 and prepare a back test before final falls.
Here is today's summary from OPX, I need sleep early tonight, you guys/girls take a look at charts mention here, I will see you in blog tomorrow morning.
Bullish Flow
Options activity picked up in Petroleo Braseilio (PBR/A) Wednesday. Shares of the Brazilian energy giant fell 60 cents to $32.47 despite gains in crude oil. Crude finished pit trading up 59 cents to $71.06. In the options market, trading was active in PBR (class A), with 17,000 calls and only 120 puts traded. June 35 calls were the most actives and it appears that buyers were driving the volume, perhaps betting that the stock might bounce before this week's expiration.
Bullish trading also surfaced in Allstate (ALL), Sara Lee (SLE), and Lexmark (LXK).
Options activity picked up in Petroleo Braseilio (PBR/A) Wednesday. Shares of the Brazilian energy giant fell 60 cents to $32.47 despite gains in crude oil. Crude finished pit trading up 59 cents to $71.06. In the options market, trading was active in PBR (class A), with 17,000 calls and only 120 puts traded. June 35 calls were the most actives and it appears that buyers were driving the volume, perhaps betting that the stock might bounce before this week's expiration.
Bullish trading also surfaced in Allstate (ALL), Sara Lee (SLE), and Lexmark (LXK).
Bearish Flow
Put volume picked up in Carnival Cruise (CCL) ahead of earnings. The company is due to report Thursday, before the opening bell. Shares gained 52 cents to $23.05, but sentiment in the options market seemed cautious, with 15,000 puts and 5,700 calls traded. June 22 and 23 puts topped the list of most actives, as some players bought out-of-the-money puts ahead of the news.
Bearish trading also surfaced in Wells Fargo (WFC), Office Depot (ODP), and Juniper Networks (JNPR).
Put volume picked up in Carnival Cruise (CCL) ahead of earnings. The company is due to report Thursday, before the opening bell. Shares gained 52 cents to $23.05, but sentiment in the options market seemed cautious, with 15,000 puts and 5,700 calls traded. June 22 and 23 puts topped the list of most actives, as some players bought out-of-the-money puts ahead of the news.
Bearish trading also surfaced in Wells Fargo (WFC), Office Depot (ODP), and Juniper Networks (JNPR).
Index Trading
Options activity picked up in the Mini-NASDAQ 100 Index (.MNX) Wednesday. The index tracks the NASDAQ 100 Index, divided by 10. It gained 1.27 to 145.59 after the tech-heavy NASDAQ outperformed. Trading in the options market seemed cautious, however, after 42,000 puts traded, or about 2X the number of calls. June, July and September 145 puts were the most actives, with some investors possibly rolling positions out of the Junes and to the July and September expiration months. Outside of the MNX, the CBOE Volatility Index (.VIX), the S&P 500 Index (.SPX) and the Russell 2000 (RUT) were also among the most actives in the index market. Trading was active ahead of this week's expiration, with 817,000 puts and 486,000 calls traded across all index products.
Options activity picked up in the Mini-NASDAQ 100 Index (.MNX) Wednesday. The index tracks the NASDAQ 100 Index, divided by 10. It gained 1.27 to 145.59 after the tech-heavy NASDAQ outperformed. Trading in the options market seemed cautious, however, after 42,000 puts traded, or about 2X the number of calls. June, July and September 145 puts were the most actives, with some investors possibly rolling positions out of the Junes and to the July and September expiration months. Outside of the MNX, the CBOE Volatility Index (.VIX), the S&P 500 Index (.SPX) and the Russell 2000 (RUT) were also among the most actives in the index market. Trading was active ahead of this week's expiration, with 817,000 puts and 486,000 calls traded across all index products.
ETF Trading
The Direxion Financial 3X Bear Fund (FAZ) gained 32 cents to $5.23 after the financials faltered Wednesday. Options activity jumped, with 122,000 FAZ calls and 23,000 puts traded. Some players were buying June and July calls at the $5 strike, betting that the weakness in the financial sector might continue over the next few days and seeks. FAZ is a leveraged fund designed to move 3X the inverse of the financial sector. June options expire Saturday. July options expire in 30 days. Other than that, the Spyders (SPY), the iShares Emerging Markets Fund (EEM), and PowerShares QQQ (QQQQ) had among the more actively traded index contracts. Roughly 2.8 million puts and 2.2 million calls traded across all ETFs.
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