Collective Intelligence!
I don’t care – I need a woman! Hurdles Are Still High for a New Fed Front-Runner — The first would be to win confirmation from the Senate – an obstacle that doomed the previous front-runner for the job, Lawrence H. Summers. http://nyti.ms/1dvuHD4 Also, there is chatter – Japanese bond investors are now ready to buy bonds again, but only after confirmation of Janet Yellen as the next Fed chair. In due time…
Today started with 300k ESZ traded on Globex, trading range was 1713.75 – 1719.00. Thursday’s regular trading hours (RTH’s), SPZ pit session trading range was 1723.50 – 1713.50 before settling at 1717.40, down 0.4 handles. In Asia, 8 of 11 markets closed lower: Shanghai Comp. +0.29%, Hang Seng +1.67% , Nikkei 0.16%. In Europe, 7 out of 12 markets were trading modestly higher: DAX +0.17%, FTSE -0.02%. Roger_Volz (05:27) HK +1.67%/Bombay -1.7% on rate increase/ indonesia -2.8%/ [AAPL] roll out / German weekend elections-coalition cobble to take a while. stephen_c (06:06) lots of action today, house votes to kill Obama care, 4 FED heads talk (George, Tarullo, Bullard and Kocherlakota), German elections over weekend, rebalancing, all will influence trading as well as quadruple-witching options expiration. DeMark SPZ pivots for today 1720.45 and 1710.45.
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Today’s December S&P 500 (SPZ) pit session opened 1 handle higher to 1718.80 -1718.50, marking the high before quietly fading back throughout the morning, printing a low of 1704.50 – retesting the previous front month high of 1705 area on 8/2. The equities were soft from the opening bell as profit taking and a lack of leadership by the bulls led the way to some sorely needed back and fill. iceChat (08:51) FuturesTNT $ES_F-lots of good stuff early on Dennis. This future though did hold its low from yesterday on Globex, but looking for 1711.40 and 1704.90. Nice look Top Notch! However, a new intraday low of 1701.80 traded at 2:34 followed by 1701.50 after the cash close.
I have touched on the notion of a blowoff top in the last two editions of the Market Recap and I think we are seeing some of that come to fruition. Fed Governor Bullard said Wednesday’s Fed decision was “borderline” and that added to the early weakness as the FOMC sugar high slowly melted away while also questioning the FOMC transparency for the second time this week as Washington and the pending budget/debt ceiling fight/debate continues to fill the airwaves and can only get worse before it gets resolved. Dysfunctional… “It is a wolf in wolf’s clothing.” — Pelosi on House budget bill.
iceChat (09:32) Market Color VIX – EXCLUSIVE CONTENT First hour volume in [VIX] totals 308462 contracts, 3.82x the recent hourly average, with 166465 calls and 141997 puts trading and the index currently near 12.83 (-0.33). Front term atm implied vols are near 0.0% and SPX is currently near 1720.79 (-1.55). (SPX Crowd) [$12.83 -0.33 Fwd].
Market Color SPX – EXCLUSIVE CONTENT Over the first hour 167048 contracts have traded in SPX today, 1.42x the recent hourly average, with 54269 calls and 112779 puts trading as the index trades near $1720.79 (-1.55). Front term atm implied vols are near 11.3% and the CBOE VIX is currently near 12.83 (-0.33). (Auto Content (Trade Alert LLC)) [$1720.79 -1.55 Fwd].
Gary_T (11:24) [SPY] is trading ex-dividend today / yesterdays buyers into the close for dividend / are gone now. Sam_E (11:32) 1706 should hold es but the scary thing is we have an air pocket from there down to 1700 where virtually no contracts traded and its not heavily owned till 1697. Roger_Volz (12:16) The SPDR Financial Fund is seeing enormous put trading today as shares slip from Wednesday’s highs Dec 20-18 p 191k…selling Oct put spreads to finance? Sam_E (12:27) this nq better bounce itself hard at 21 or it has 321150 in the cards.
This shows you the turns of quadruple-witching options expiration. Match this up to your charts >> The early look on the closing imbalance showed (14:18) MiM – MrTopStep Imbalance Meter showing 50/50%. By (14:32) the MiM showed 52% buy side $159M and (14:41) 53% buy side $242M, iceChat (14:44) 58% buy side $540M and flipped iceChat (14:48) 286mill for sale. At 2:47 the SPZ was trading 1703.00 area when the closing imbalance showed a small $132M imbalance to the sell side. The cash close traded 1702.70 area before settling at 1702.40, down 15 handles on the 3:15 futures close. Well, it was a long week in the green and closed out the third consecutive week of higher gains as the NYSE tops 1bil in volume and the e-mini tops 1.7M.
The S&P conducted their annual IWF review and quarterly rebalance for the S&P 500, 400, and 600 indices after the close today and may have an effect on the indices Monday morning. Sunday the Germans head to the ballot box, German elections and China reports their flash PMI for Sept Sunday night. European flash PMIs for September roll out at 3amCT followed by the U.S. flash PMI for Sept 7:58amCT. Also, Draghi speaks at European Parliament in Brussels while the Fed’s Dudley and Lockhart are also scheduled to speak. Dudley is likely to be the more important of the two Fed heads. Also, Monday, the day following the expiration, is statistically a weak day.
Inside Boehner’s Plan to Avoid Shutdown (And Wound Obamacare) Forget today’s big spending bill vote. House leaders know the Senate will reject it and are ready to respond. Here’s the GOP playbook. House Republicans have orchestrated a master plan to avoid a government shutdown, delay the implementation of Obamacare, and maintain the current, post-sequester spending levels. http://bit.ly/1fgxvFR Well, at least they were true to their word today…
Shutdown sparring a warm-up for debt fight — Everyone in Washington and on Wall Street is fixated on the potential for a government shutdown in less than two weeks. But those in power and closest to the situation say a debt default is a bigger threat. That’s the thinking at the highest levels of Congress as Washington dives headfirst into a contentious fall. Read more: http://politi.co/19hw1X3
Along with the S&P 500 rebalance, the Dow Jones changes Industrial makeup 9/20/13 post close, adds [GS], [V], [NKE]. Replacing [AA], [BAC], [HPQ] (on expo day could make a difference for expo spreads). Dow 30 shake-up is the first “three-for-three” change to the blue-chip index since April 8, 2004, as high-priced stocks replaced lower-priced stocks. The release also said the changes won’t cause any disruption in the level of the index, because the divisor used to calculate the [DJIA] from its components’ prices on their respective home exchanges will be changed. http://on.mktw.net/18LVwQb
Italy on course to break deficit limit, vows to fix it Govt’s economic blueprint forecasts 3.1% deficit-to-GDP ratio – Rome, September 20 – Premier Enrico Letta admitted recession-hit Italy was on course to cross the deficit limit set by the European Union on Friday, but vowed that his weak left-right government would bring it back on target by the end of the year. Letta, whose grand-coalition executive is in danger of collapsing in the fallout of the supreme court’s decision to uphold a tax-fraud conviction against centre-right leader Silvio Berlusconi, presented an amended version of the government’s economic blueprint, the DEF, with revised forecasts – By Paul Virgo (ANSA).
This is for every trader in the world. If you have never heard of Charlie D, now is your chance. Put some headphones on and listen to a master bond trader talk to a trading class he offered for free. http://mrtopstep.com/2013/09/traders/
But who would have thought part 1) Did someone say something about a retest of the contract high? Shot a week ago Thursday at 10:00CT: Brian Shepard and Jill Malandrino @TheStreet http://bit.ly/186FaiE Also, posted last Friday: Jason Carter (10:16) bull flag 120 min vs right shoulders forming. buying vol may be the way to go. See Sept vol bid into FOMC. elway (10:46) hard to sell a quiet tape with positive breadth on the friday before expiration. The breadth has remained positive since…until today!
But who would have thought part 2) We have been posting the stats lean to the upside through the roll and the quarterly rebalance. It will be interesting how this week plays out – following the gains over the last 45 days. Coming into today [Wed.] the S&P 500 rallied over 6% in September. This month alone the December contract has rallied from the Friday, Aug. 30, settlement of 1624.60 to a new all-time high of 1723.50 post FOMC sugar buzz…
