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Brian's Friday recap: Dow breaks its streak; bank buybacks and POMO

Brian Shepard

By Brian Shepard    Next week the Fed will debate the risks and efficacy of continuous stimulus. However, the chairman has already made known his feelings. His stance is that doing nothing has the greater risk. The two-day meeting concluding Wednesday will provide some insight into the continuation of the experiment. Many board members see the risks of removing the largesse, which amounts to $2 trillion, as creating other risks to the economy. This will be a closely watched meeting as oil has become more negatively correlated to the dollar of late. Posted by Stanton Analytics   Originally posted 2-27-13 when the June contract settled 1509.80, up 23.3 handles on that day: The S&P tends to bottom in the last week of February, then has a tendency to rally into the end of the month and beginning of the new month buying. Then the portfolio managers mark the S&P up into the March roll / quarterly expiration as all the new IRA money is flooding in. These cycles / tendencies have one more tendency left and it is well known. SELL in MAY and WALK away. Posted by the PIT BULL. Read it online: http://bit.ly/Z6QBpi    Collective Intelligence! Fed passes 14 of 18 banks without conditions - sees weakness in [GS] and [JPM] plans. [BKX] trades modestly higher. UBS $2.25bln buyback, AXP $4bln buyback, COF boost dividend 600%, BNY Mellon $1.35bln buyback. In the early trade, [JPM] was down 2%, GS down 1.5%, [BAC] up 2.5+%, [C] up 1+%.  JPM announces $6bln buyback, [WFC] $6bln, BAC $5bln buyback - floats to get smaller ... lots of firepower for MOC's. Traders looking at big POMO today following yesterday’s.     Chatter - There has been a strong movement of cash from closed end muni funds to stocks in recent days, and this may highlight the chase for return in the equity market among high net worth investors - source.    [DJIA] closes down 25 points … until today the Dow closed higher every Friday this year. The Dow's longest winning streak on record: the first 13 trading days of 1987. The index rose 10.998%."  Roger recalled, Oh yeah … when everyone started selling out of money OEXs for the premium … grandma eventually got $100mil margin calls.   Don’t miss this guy > @princetontrader aka Mike V posted his Pivots http://bit.ly/YdXJRE  At (08:47CT) Mike posted his vol windows ES: 1558.50 x 1548.50 and NQ: 2811.00 x 2788.75.   Kathy has had some very good calls too! Charts posted by Kathy Garber @tbg4321. Harmonic rotations GC http://screencast.com/t/sItBDKNqo7   AAPL http://screencast.com/t/RVJMiglEt3   NQ http://screencast.com/t/ePYAwPJcEw6   ES has retraced bearish Butterfly the minimum target at 1552.25, important sup test, a brk dn there has initial tgt 1550.25, then 1548.25, premkt chart http://screencast.com/t/35PAb2fT   CL in retracement mode of dbl bearish Butterflies, ideal min retracement tgt 93,08, premkt chart http://screencast.com/t/qArTjcNs   During the Globex session 285k ESM and 1.1k SPM traded on Globex, trading range was 1558.60 – 1554.00. Thursday’s regular trading hours (RTH’s), pit session trading range was 1557.20 – 1551.80 before settling at 1556.00, up 6 handles.   Today’s SPM regular trading hours opening range was 1554.80 – 1554.20, University of Michigan disappointed at 8:55 checking in at 71.8 vs 78.0 exp, lowest since Dec 2011. The SPM future firmed following the 9:00CT low of 1549.30 as the VIX remains near 5yr lows while volumes remain light. ESM 1550c trading size today by (10:43:47): up 64k ---  by (10:58:09):  up to 72k now -- by  (11:06:15):  chatter ESM 1550c trading size today 80k now. premium paid $170M chatter - over the last few weeks same acct bot 25k ESJ 1520c at-the-money when the Feb expired. Also, following the low, 1484 area in the S&P future they bought 20k ESJ 1500c & 30k ESJ 1520c. Looks like adding to position as the open interest increased - **no idea what was done on the hedge side.   After the open the SPM chopped around in a narrow sideways to higher price action. The SPM made a high at 1556.50 and then reversed holding the 1550 area. After the low the SPM traded back up to the 1554.00 area. The SPM was trading 1553.50 area when the 2:45 closing imbalance showed the broader market with $1.2 bil to buy. On the 3:00 cash close the SPM traded 1553.90 area before settling at 1553.60 on the 3:15 futures close, down 2.4 handles on the day. In the end, once again the quadruple witch didn't live up to its bad reputation.   Brian Shepard is a 20-year exchange member of the CME Group.  _______________________________________________________________   YOU WANT A LOOK AT WHAT OUR TRADERS SEE EVERY DAY? SIGN UP FOR THE IM TRIAL AT http://mrtopstep.com/free/ IT’S THE REAL DEAL!  _____________________________________________________ Follow us on Twitter @MrTopStep https://twitter.com/mrtopstep Sign up for our free mailing list at http://mrtopstep.com/ for full report. 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. MrTopStep, its officers, directors and its contributors may, in the normal course of business, have position(s) which may or may not agree with the opinions expressed in this report.      {jathumbnailoff}