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Brian's Friday recap: No Cyprus deal, but bears play dead; AAPL spring is sprung

Brian Shepard

Talks between Russia and Cyprus foundered Friday with no deal. The Russian Finance Minister told his Cypriot counterpart that Russian investors are not interested in developing their offshore natural gas fields. The ECB has threatened to cut off funding Monday without the €5.8 billion necessary to secure the additional €10 billion to keep the country solvent. The euro is under pressure too as Germany’s IFO survey fell 0.5 percent. It is a measure of business morale.

The fear is contagion from the Cypriot situation. If the ECB can impose or even suggest that stealing depositors money to help a failed bank is unconscionable. The people of Spain and Italy have taken notice. their computers are humming as they seek a safe haven for their money. We are of this opinion that this will spread and have unintended consequences - posted by Stanton Analytics.

Collective Intelligence! News flow from Nicosia concerning the Cypriot government's attempts to find EUR5.8bn and avoid ECB emergency funding withdrawal will be the main driver for markets this morning. Market news today will center on attempts by the Cypriot government to find EUR5.8bn and avoid ECB emergency funding withdrawal. Belief in a resolution is growing, possibly over this weekend. Basic question: can the Cyprus problems spread? Sure, but right now the new is just about Cyprus.

FXE 3000x Mar 28 130 calls bought for up to .30, 2 strikes OTM, 3849 traded against OI of 5 - pretty tasty bet on a Cyprus resolution over the weekend??? We shall see! Also, the AAPL spring was tightening for two days. Today is a breakout and the NQM is reflecting it - posted Tony LaPorta.

Equities have outperformed U.S. T-notes by +9.27% this quarter. As of the close on March 21st, our model estimates net -$20.56 billion in equity selling from pension rebalancers from calendar-based flow (net quarterly & monthly rebalancing). For the quarter, equities outperformed fixed-income by +9.27%. As a result, quarterly rebalancing flow estimates -$16.43 billion equity selling. Also, for the month of March, the S&P 500 outperformed U.S. T-notes by +2.27%. This resulted in monthly estimated rebalancing flow of -$4.13 billion out of equities. Lastly, we saw no “trigger” events in the month of March.

Anybody think S&Ps are prime to sell off next week at end of Q1? We think they could get weak on the last days of the qtr what u thinking? Jeff Hirsch of Traders Almanac said he was just looking at the SPs propensity to be weak last week of March and the rather lofty levels we are at now and the last month of the Best Six months of the stock market beginning next week.

Here's the link for Henry's, Stanton Analytics interview with professional trading magazine: http://bit.ly/YGmNga Also, another MrTopStep contributor, Carley Garner, was featured on Mad Money. She posted Wed.: Jim Cramer used our Treasury analysis on Mad Money last night: http://bit.ly/YTzUxM

Don’t miss this guy > @princetontrader aka Mike V posted his Pivots http://t.co/wDdoK1oxcD Webcast http://t.co/6coBlZuns5 At (08:49CT) Mike posted his vol windows ES: 1549.75 x 1539.50 and NQ: 2790.25 x 2769.50. Bears have already conceded the 3x pivot at 1542 in the premarket. They need to get it back. (09:04CT) Middle band held nicely on the daily, bears can't give up too much ground or we'll be back at 56 before you know it. Bears conceding the 1545.75 opens up a move to the BEN/Upper Level 1549.50-1549.75

Kathy has had some very good calls too! Charts posted by Kathy Garber @tbg4321. Harmonic rotations ES http://screencast.com/t/0MFvakL0Zrk2 NQ http://screencast.com/t/A1HfkWmI CL http://screencast.com/t/Xa1oXRHR3Q GS http://screencast.com/t/llyriGRflq CL failed Gartley has upside tgt of 93.80 PROVIDING 92.79 holds as support, updated chart http://screencast.com/t/hL4KG5m3SNi 6E in retracement mode of Bearish Garfly, ideal min retrace tgt 1.2969, updated chart: http://screencast.com/t/7htJLey6d0

RealTradersWebinar is hosting a MEGA WEBINAR this Saturday (March 23) -- Click here for more information and reserve your spot: http://tiny.cc/pf7ztw

During the Globex session 230k ESM and 1k SPM traded on Globex, trading range was 1543.60 – 1534.00. Thursday’s regular trading hours (RTH’s), pit session trading range was 1536.90 – 1548.90 before settling at 1539.10 down 10 handles. In the premarket the dollar was down, crude and euro were up, indicating risk on. The U.S. equity futures were trading slightly above fair value, though lower than earlier levels, as focus remains on ongoing Cyprus bailout crisis. There are no macro releases scheduled today. Attention remains on Cyprus as Finance Minister Michael Sarris heads back to Nicosia with no help from Russia. Traders were waiting on a statement expected later in the day. The FT and the WSJ report this morning that the Cyprus parliament will debate three new bills and added support for a resolution.

Today’s SPM regular trading hours gapped 5.5 handles higher to 1544.00-1544.70. This morning the broader market opening imbalance showed an overall $304.09M x $149.43M, a very small net $155M to buy. What we saw from here is people keep selling the spoos on the way up and then put in the buy stops and the bulls make it their mission to elect them. Posted at (09:08CT) Talk of a deal in Cyprus. Headline at (09:10CT) CYPRUS'S NEOFYTOU SAYS BELIEVES IN NEXT FEW HOURS HAVE DEAL. The semi-denial came at (09:49CT) troika rejecting certain options that cyprus is presenting. The equities held their hard earned ground, but volume was light as has been the case on Fridays over the last too many months... At that point the bears left the building or sat out on the sidelines. It’s called live to fight another day. The problem with that was it made for a lackluster day for trading. After the SPM traded a daily high of 1551.50 the 1547 area held on the back and fill. The remainder of the day was spent in a sideways crawl even with (much chatted about, heck we even posted it here since Tuesday) headline at (12:07CT) FITCH PLACES UNITED KINGDOM ON RATING WATCH NEGATIVE - Fitch will complete review of UK rating by end of April. Chatter - the equities were holding well following the perceived negative headlines once again had the remaining trader sitting on the sidelines. The SPM was trading 1548 area when the 2:45 closing imbalance showed the broader market with a very small to modest $378mil to buy. On the 3:00 cash close the SPM traded 1550.30 area before trading a new daily high 1552.50 during the closing range and settling at 1552.00, up 12.9 handles on the 3:15 futures close.

Brian Shepard is a 20-year exchange member of the CME Group.

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