Brian's Monday recap: Buy program day; what were folks saying last week about bonds looking toppy?

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Jimmy Ticks suggested there was a real change in market behaviour today from the previous 2-3 weeks, volatility declined, moves were orderly, headlines quiet, news less important. Felt like POMO cash and portfolio fund cash put to work. We offer that the backstop remains in place following Friday's NFP disappointment of 88K jobs added as well as the soft economic data over the past couple of weeks. This obviously suggests some recent slowing in growth and led to the modest downside risk we have been seeing since the ADP data tipped the scales lower. Now we wait on Fed Chairman Ben Bernanke tonight addressing the Stress-Testing Banks: What Have We Learned? At the 2013 Financial Markets Conference at 6:15 p.m. CT. Also, April 10th - FOMC Minutes - Meeting of March 19-20th, 2013 at 1 p.m. CT. Suzie Smith offers: What's the saving grace for the market? Why, it's Ben Bernanke, of course! He is an economic Clark Kent. Superman with a fist full of dollars. So start picking stocks. Superman has your back.

Collective Intelligence! PivotBoss (08:34CT) Open with minor pull-back...great buy zone between 41.25 and 44.25 for ES...not sure if we'll get it, but that's the initial plan. PivotBoss (09:06CT) dropped into the 41.25 to 44.25 buy zone and found initial responsive buyers...not overwhelmingly bullish yet...but trying to work itself out.

The early suggestions of new highs because of those daily pivots holding have unfolded. The s&p now looks poised to test its globex high of 1552.00, but watch the 1552.80 price. I have it labeled for stops, but usually it finds resistance at first asking. However, I like the idea of the testing the daily fib of 1554.90, followed by an objective today at 1558.40. The Nasdaq is all about finding the 2780.50 price, which I will short at first asking if achieved. Overall, I could be asking for too much, but the trend is to the north heading into the later stages of today. If those bonds take out its weekend low of 147.14, I'll look for support at 147.05 and 146.29 -- posted by Top Notch Trading at (12:51CT).

Stanton Analytics posted at (08:39CT): Crude: May is still in a congested pattern with a bias to the downside for now. It will become a full fledged bear with a break of 92.70 that will eye a test of the Friday low. The larger degree wave count has room for a new low. The minor resistance is 93.40 to minor upside pivot 93.75.

Looking under the hood, there is definitely a pick up in speculative call buying today, still quite mild but there is some appetite for risk. Much of this is focused on dip buying, especially in sectors that have been particularly weak the last couple of weeks, computer services, oil/energy, retail posted by Jimmy Ticks at (15:28CT).

Posted last Friday at (08:29a.m. CT) Carley Garner: We are selling calls against the bond rally. The June 152 calls for about 30 ticks...they were trading at 6 a few short days ago. We are hoping for a decline in volatility. Here is a chart: https://d1wh43egtz3cgo.cloudfront.net/promotion_images/0448/3758/original/april5bond13.png

Carley Garner 4/8 update: We are coming into the week short crude oil strangles...looking for overall sideways to higher trade. Also, we are holding short June 152 bond calls from Friday (sold against the rally). We are looking for lower volatility, and back and fill trade. Also posted Friday: Time will tell, but I think today may have been a short-term high in the treasuries. It has that capitulation type look on the charts - posted by Tony LaPorta (13:44CT) as the bonds were trading near 148, up almost 2 full points.

MrTopStep video shot about 9:15a.m. CT. Top Notch aka Tim Haefke http://youtu.be/UdxQuhfZ7Ew

Kathy has had some very good calls! Charts posted by Kathy Garber @tbg4321. Harmonic rotations: DX scenario http://bit.ly/10NP2uR

During the Globex session 220k ESM and 1.1k SPM traded on Globex, trading range was 1545.10 – 1551.90. Friday’s regular trading hours (RTH’s), pit session trading range was 1549.00 – 1533.50 before settling at 1546.00 down 8.5 handles.
Also, the opening imbalance showed an overall $177.76M x $357.48M, a small net of $180M to sell.

The regular trading hours opened two handles higher at 1548.50 – 1547.50, marking the high before stepping lower to 1543.50 at 9:19CT and back up to 1548 area by 9:49. William Blount (09:37:07): bulls are in must perform -- spill was up and low for a.m. NEEDS badly to be sealed or runs risk on coming out of Sunday upside down -- ie, not the NORMAL indicator. Lunch needs to be high for day thus far to be tracking normal – opening 1548.5 and Nasdaq 2765 need converted. PLAIN ENGLISH - whoever wein s the BATTLE OF THE OPENINGS, WILL WIN THE DAY. From 9:45 through 12:43 the SPM traded between 1545 -1548 area in very light volume. After converting the open range the SPM buy programs and buy stops were elected taking the SPM up to new intraday high(s) of 1553.50 at 1:16 and 1554.00 by 2:15. 1555.50 area was trading when the closing imbalance showed a moderate $536M to the buy side. On the 3:00 cash close 1557.80 traded before printing a new daily high of 1560.20 and settling at 1559.20.

Brian Shepard is a 20-year exchange member of the CME Group.
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DISCLAIMER: The information and data in the above report were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities.

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