First gap and crap of April as traders await NFP; what we do with first passes

Brian Shepard
April 3, 2014
mts marketrecap 330 300x207 First gap and crap of April as traders await NFP; what we do with first passes
mts marketrecap 330 300x207 First gap and crap of April as traders await NFP; what we do with first passes

Collective Intelligence!

So much time, so little action … so we are going to join the crowd and cut today short.

Regarding the employment situation, it’s all up to the NFP report tomorrow. Following the ADP data, the NFP outlook began to jump higher. Also, the recent disappointments in the payroll data and the lack of any substantial corporate preannouncements has the trading floor abuzz. There is hopeful chatter of the data catching up and the NFP printing up toward 225k from previous 190k to 200k.

Snippets: PITBULL (08:59) charles schwab statement on hft comments that 95% of orders are cancelled – nice business model which will be ending.  Also, admit HFT is a “growing cancer”…

[SCHW] Statement on High-Frequency Trading

The 30-year mortgage rate has climbed to 4.41% and the steady rise in prices paid has garnered unwanted attention by potential buyers in the housing market that may start backing off. Nobody likes paying the high tick …

This is a MUST SEE  >  Putin unleashed in Fallon style

Today started with 190k ESM traded on Globex, ESM trading range was 1887.50 – 1881.25. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1886.00b – 1876.30 before settling at 1882.90, up 5.1 handles. The overseas markets were firm on China stimulus plans, emerging markets strength and the overall hopefully optimistic temperament in the global economy. A small increase in jobless claims was shrugged off.

Today’s RTH’s, pit session, gapped 3.5 handles higher to 1886.70 – 1886.00 and traded an early all-time high of 1887.00 as the [DJIA] hit an intraday record high too, setting the stage for some small profit-taking in the indices in front of tomorrow’s jobs data update. Especially considering the S&P has rallied 47 handles off of last Thursday’s 1840.60 settlement price. The breakout through the 1875 area has the bulls hopeful for an extension to 1900 and beyond.

In the pre-market william_blount (07:57:06): when BOTH CAMPS want it to go down it goes down, when both camps want it to go up it goes up … AND THEN THEY DUKE IT OUT AT A KEY INFLECTION PRICE. Not that the disappointing ISM services data, checking in at 53.1 vs exp 53.5, had much to do with it, but the equities took a respite as April experienced its first gap and crap following several last month. Following the early intraday high at 1887 the S&P quietly stepped sideways to lower through the midafternoon. william_blount (08:46) 3689.5 — FOCB (fish or cut bait) for NQ’s and possibly the market as a whole. In the S&P futures, any price over 1887.5 S&P THE RISK MARKER TO SS, is OOPS as the bears soap is in mid air – would lose another chance to reverse the rally. william_blount (09:43) SPOT 1887 SPILL HIGH == A.M. LOW needs to be sealed at the roundie 1880. william_blount (09:47) RS-what do we do with first passes? Roger-S  Fade ‘em. And that they did, even if it was quietly. Roger_Sawyer (10:32) Biotechs weak today: [XBI] and [IBB] down over 3%.

The afternoon session was sideways to lower, printing an intraday low of 1875.70 by 1:40 before bouncing back. The (14:00) MiM – MrTopStep Imbalance Meter showed a small $120M buy side imbalance and stepped up to $485M as the futures retested the previous settlement. On the cash close the futures traded 1881.30 area before settling at 1883.00, up 0.1 handles, while the [NDX] lagged, down 26 handles, and the [DJIA] closed fractionally lower..

Eco calendar:

1) Employment situation / jobs data tomorrow - NFP estimates growing from 195k to 225k.

2) Earnings season kicks off the following week, so traders will be listening for potential weather-related warnings … Thus far, the preannouncements have been surprisingly light, but there is always next time after [AA] officially kicks off earnings season on Tuesday.

Show us the jobs … can’t wait til tomorrow! Post FOMC decision presser > clarification / support >> The 1865 area was trading when Fed Chair Yellen’s comments rolled out … “economy needs EXTRAORDINARY support for SOME TIME”. Yellen also said: “I believe that view is widely shared by my fellow policymakers at the Fed” “Economy Still ‘Considerably Short’ of Fed’s Goals” … “Fed Short of Reaching Employment and Inflation Goals” … “Recovery still feels like a recession to many Americans”. Again nothing new, as many have been thinking the recovery has had its bumps along the slow growth snail trail.

Here’s some clarification on what Bullard said Wednesday about a further slowing of inflation possibly delaying the taper: