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Brian's Friday recap: Thin to win in the ES, selling calls into the bond rally

Brian Shepard

The economic data has generally been on the soft side over the past week or two, which suggests some recent slowing in growth and some modest downside risk as we have been seeing since the ADP data tipped the scales lower.   Collective Intelligence! At (07:14amCT) Top Notch Trading posted: The 30 year bond has almost completed its full cycle of a gap that was made from Dec. 31st - Jan. 2nd. The gap bottom and top have been covered on the Globex session as it awaits to seek its gap seal price of 147.16. Other levels of resistance come at 147.28 and key price of 148.16. Pivotal price of 146.08 heading into this morning's open and the 145.15 price is a key target downside. One would "think" these treasuries would soften up these future indexes, but this trade is a whole new ball game.   METAL VOL: Industrial metal vols dead post payrolls (do you buy puts for a short term dip or do you sell because there will be more QE is the question we are grappling with at the moment). Precious - no uncertainty here - vol are softer and prices are rallying. SILVER down 1% in the 1m and GOLD down 0.7% so far - JAMES W.   This will be like a 2008 commodity- and employment-led deflation. All macro indicators pointing down. The monetary spigots will run but won't help. All metals will trade lower, especially copper, correlation of asset classes will be high and all metals etc., will sell off. Classic deflation. Any attempt to re-inflate won't work. You will get a huge move like in Nikkei but it won't live long - posted by Chance.   At  (08:29CT) Carley Garner posted; 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   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.   Say hello to corporate earnings season. So far, the pre-announcements have been negligible.   MrTopStep's Saturday webinar features Thomas DeLello of OrderFlowEdge -- "How to stack the odds in your favor using order flow." Sign up today: http://tiny.cc/vc5wuw   Kathy has had some very good calls! Charts posted by Kathy Garber @tbg4321. Harmonic rotations: ES http://screencast.com/t/D2JT7A4P9Ih    6E http://screencast.com/t/3UKCVfuG    NQ http://screencast.com/t/UUN00KCvaLd    CL http://screencast.com/t/tKs6MoLBS  13:58:38): ES updated by Kathy at (13:58) testing heavy confluence resistance ... a hold below this 1544 zone has primary target of 1505.75 (largets harmonic rotation) w/ important scaling pts (aka potential reversal pts) at the noted pattern PRZ's http://screencast.com/t/tqx8tYyQc9v   During the Globex session about 550K ES traded before the non-farm payroll number checked in at a miserable 88k at 7:30CT. At (07:52) william blount posted; ITS ALL ABOUT (previous chart sent) NAVY DARK BLUE. NOW guys on that CHART -- 1538.57 CASH -- and that was the reason for the snap back off the 1534 e-mini because: CASH IS THE DOG AND THE FUTURES ARE THE TAIL THAT WAGS THAT DOG. Parting shot: IT WAS NOT RAINING WHEN NOAH BUILT THE ARK...but until we overlap 1471 cash you can not think about Christening the boat. Also, the opening imbalance showed an overall $67.37M x $865.09M, a big $800m net to the sell side.   The regular trading hours started with almost double the average overnight volume of over 550k ES traded. The opening range 1535.00 - 1535.50 and the early move was to retest the Globex low before grinding sideways to higher throughout the morning on light volume considering the employment data as well as the sizeable disappointment. We have written about the  in the past - do all the selling and run all the sell stops in Globex and jam them up all day. Granted, the midday trade was comparable to a holiday lonely Friday afternoon when all the other markets closed early as 1540. Thin to win... Tony LaPorta offered, Bad news is good news...they don't call him helicopter Ben for nothing. QE to infinity...and if they haven't squeezed out every short on the planet...lets just have one more push into the close and make them all myself included shake my head all weekend that the DJIA finished near the highs of the day after such abysmal data. The 2:45 the SPM was trading a new intraday high of 1546 area when the closing imbalance showed the broader market with a modest $450M to the buy side. The 3:00 cash close traded in the 1554.55 area before settling at 1554.50, up 6 handles on the 3:15 futures close.  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.    {jathumbnailoff}