I’m not really certain they are thinking this through. Yesterday the Job Number: Initial jobless claims climbed to 770,000, an increase of 45,000 from the previous week’s revised level of 725,000. So 45,000 unemployed folks rock the boat. I get that and I understand that.
However, I’ve heard reports that 160,000 unemployed folks are crossing Trump’s hole in the border wall down in Texas. And they are only able to catch one out of every three. So, 160,000 x 12 months is 1,920,000 unemployed folks in twelve months. I’ve heard that revised upwards to potential for two and a half million by next year.
Unexpected increase in jobless claims was partly due to jump in claims in Texas due to the impact of Winter Storm Uri. That’s the same state where 160,000 unemployed folks just entered the country…last month? How will they reflect those numbers?
And the bonds? I’ve been talking about that in the AM TURN PROS and NUMBAHAS for weeks. And yesterday the market woke up. With all this free money and the FED’s promise to not change interest rate till 2023, reminds me of a Labor Day sale or the American Furniture Commercial on TV. There is a meeting in Alaska with China. And don’t forget the carbon free planet promise by 2055. A change is gonna come. People get ready… Don’t need no ticket you just thank the loard!
The bonds are back baby. Trading 1.74% highest this year. The FED gave them what they wanted no interest till 2023. I made a video, you may want to watch it. If you’d like to see the video it’s invitation only just drop me an email to email@example.com
If you were trading yesterday and expecting the price to just keep on ripping, you might have been disappointed. Sure price had all the earmarks of a bullish day. I went S3H which is bearish. I even had a subscriber call up before the market open and question my reasoning. I kept on seeing selling by the insiders.
And the bonds, they were talking and screaming at times. No interest till 2023 I don’t think so!
The algos played games around the 10:30 marker. I made a comment in chat I felt the groups were getting weak. By 11:00 it was a sideways grind then at/around 12:00 a strong up-wave sealed the high.
I had the 3954 handle as a level so you would have taken on a little heat as the high of day was found at the 3958.75 handle at the 12:16 marker. At 12:17 the upthrust fell back into the trading range and price never looked back and closed weak at 3906 handle. That’s 24 points below the YELL at 3930!
Looking Forward Friday, March 19, 2021
The big question is who wants to go home short over the weekend? There is no news to move the needle. We tore through the FED YELL big support made on 3/15 and Globex had found a bid at the 3898 made on 3/12. The cycle ends and a weekend begins. As I write, there is a 15 point rally off the lows made on the PEON open.
We have potential support made at 14:45 and a potential selling climax at 15:55 marker 3900 even on yesterday’s trade. With the automatic rally to 3919 at 21:50 marker down to the PEON open as the secondary test. At 14:45 we just touched the supply line and at 15:55 completed the breaking of the supply line from 3/18 made at 3:00 and 6:20 marker.
It’s either a resting spell for further downside action or potential accumulation to support a move up to the 3950 handle or higher. The bonds will be the lean. No news, biggest topic trending on the bing search engine is Billie English change from green to blond hair. And the millennials tell me it’s Eilish not English.
I’m not thinking you’ll see any tweets moving the market. I’d like to have seen a bigger volume climax for a full end to the down move. Best could be yesterday’s action was preliminary support. If the PEONS get over their skies, CASH may move price down to NY City value. If not, a rip to high’s do they really need a catalyst?
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On a day like yesterday, we see that its prudent to take profit. The intraday low was 58.20 which was a 10% correction from the level where we gave the short entry which was at 65.70. This morning we see a bounce, but the sell signal is not yet cancelled. A close end of day above 63.65 cancels the sell signal. Next downside target 57.80.
GMTT publishes three weekly its GMTT research report covering the following: Global Indices, VIX, a selection of stocks, Treasury Bond, Commodities, Soft Commodities, Currencies, and Bitcoin.
The 10-year Treasury yield is a key benchmark for lending costs. When bonds and notes go up, interest rates go down. But when equities fall, yields fall, and yesterday the 10-year treasury note fell driving the yield up to the highest it’s been since January 2020 at 1.7%. Initially, the ES and NQ opened lower and bounced but as the day wore on…so did the Nasdaq. All the hot stock names took hits, Amazon, Apple and Netflix all fell 3% and Tesla fell almost 7%. Also adding to the weakness, crude oil fell 7%.
Our view, there is clearly a negative correlation between higher yields and market price. As interest rates rise, the cost goes up. Investors have been dumping over-priced tech stocks and piling into stocks that will benefit from an economic rebound as more states open up from the COVID-19 lockdowns. I will be honest, I didn’t think the internet rates would fall this much. I thought the stock market would shake off the rate scare and go to new highs which they did. On Wednesday the ESM made a new contract high at 3987.50 and on Globex last night the future traded 3898. Our lean, Fridays, for whatever reason, tend to be counter-trend days. If the ES gaps lower I’m buying the open or the early dip. If the bonds firm it’s possible the early lows could be the lows of the day. If the markets fail then look for initial support at the 3885 level and below that at the 3860 level.
Danny Riley is a 39-year veteran of the CME trading floor. He ran one of the largest S&P desks on the floor of the CME Group since 1985.
As always, please use protective buy and sell stops when trading futures and options.
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