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Looking to the $SOX and M&A’s for eco direction; key level in $SPY for opex

Brian Shepard
mts marketrecap 330 300x207 Looking to the $SOX and M&As for eco direction; key level in $SPY for opex

Collective Intelligence!

Global equities falling off a cliff, synonymous with a “truce overseas” – like, in a truce in any region over yonder – just doesn’t happen, at least when you expect it to. Well, that is what happens when traders are tripping over themselves to follow the flow. Yesterday was an overload of headline risk and today it was back to reality and re-sizing up the all-time high.

Snippets: Lu Ting dismissive of HSBC PMI – says “did a poor job of predicting turning points in Chinese economy in past two years” – Tom Orlik.  ”Looking ahead, as weather normalizes, Citi’s surprise index is likely to rebound and if it does (our company surveys indicate that the economy is still OK), bond yields are likely to rebound with it.”  Yesterday, the SOX outperformed yet again (this index has finished in the green for 10 of the last 11 sessions) … Remember – semis lead the eco and are a good indicator of growth … also, … Makes it hard to be short:  *Coca-Cola buys 10% stake in Green Mountain for $1.25B.  *Comcast acquires Time Warner Cable for $45B.  *Actavis buys Forest Labs for $25B.  *Apple repurchased $14B and FaceBook goes green after spending $16 Billion yesterday post close. Note: At $16 billion, WhatsApp has a market value greater than 47% of all S&P 500 companies. These are but a few of the M&A going down in the last few months … follow the money!

Today started with 365k ESH and 1.6k SPH traded on Globex, ESH trading range was 1829.50 – 1817.25. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1823.50 – 1844.30 before settling at 1825.50, down 11.9 handles. The Ukraine truce that wasn’t, the overseas flash PMI’s disappoint, [WMT] … yesterday’s weak close, dump from 1839 afternoon high weighed down the Globex session. The light at the end of the tunnel was USA bright spot – the manufacturing PMI data.

Today’s RTH’s, pit session opened 2 handles higher at 1827.80 – 1827.00  first 15 min… 1831 – 1825.50 area and the first half hour low was 1823.50 area. The [NDX] was lagging again today, but [DJT] were showing some leadership. sam_m (09:44) Open interest [SPY] 184, still blows away anything nearby for expiration – and these high OI areas act like magnets.

A side note: The USA and Canada played a hell of a game today and methinks the USA could have benefited from one of those magnets on the open net shot. That must be the feeling that the bears have every time the bulls regain the momo! Well, either way the price action was at a standstill during the hockey game, hovering within close proximity of the intraday grinding higher price action.

Sam_E unbelievable how identical our charts are from our first NDX high, the drop and retrace and drop that followed. Identical chart pattern to our new high, the retrace and todays close. The retrace high was also at Thursday’s close.

The MrTopStep imbalance Meter, MiM, showed a moderate buy-side imbalance before before growing to a large $800M going into the close. However, the futures topped out at that magnet – 1840.00 intraday high, retest of yesterday’s late high and dropped. The futures traded 1837.00 area on the cash close before settling at 1836.20, up 10.7 handles. Volume was 1.6M E-minis traded.

Coming events: http://www.investing.com/economic-calendar/