202 replies to this topic

[dTraderB]

4 CRUDE LONG

This has been the busiest trading period for me this year. Also trading HANG SENG, NVDA OPTIONS & CRUDE. RALLY cooled diwn after that ISM report. But, could still reach my ES 4350 target before reversing
Building SHORTS with HEDGES but increasing RISKS as market rallies. MARKET BREADTH is important but markets have rallued fir weeks with BAD BREADTH. IT IS ONE FACTOR, not the most important. MONEY MARKET FUNDS parked for safety waiting to flow into the market, FOMO, AND SENTIMENT are far more importsnt.

"Major indexes have overcome a series of challenges to power higher this year. But some investors are worried that this performance rests on just a few heavyweight stocks.

The S&P 500 has climbed 11% this year and is poised to enter a new bull market after rising almost 20% from an October trough. Most major indexes in Europe are up more than 10% in 2023, with Frances CAC 40 among those that are hovering near all-time highs.

The performance has surprised asset managers who began the year on the sidelines amid concerns about the trajectory of interest rates and the global economy. Indexes have shrugged off a banking crisis and debt-ceiling standoff in the U.S., and worries of recession in Europe.

But for some investors and analysts, things dont look so cheery below the surface. Market breadth, which reflects how many stocks participate in a rally, has narrowed, signaling possible trouble ahead."

[dTraderB]

LIGHT WEEK
"Key developments that should provide more direction to U.S. markets later on Tuesday:
U.S. Secretary of State Antony Blinken visits Saudi Arabia
U.S. corporate earnings: JM Smucker

"
A relatively quiet week for U.S. macroeconomic and market news has investors resting on an assumption the Federal Reserve will skip a rate rise at next week's policy meeting, while considering one last hike in its campaign next month. Soft service sector surveys for May on Monday underlined that idea."

[dTraderB]

Still haven't shorted NIKKEI, not convinced of a ST TOP, will watch & analyze, not getting into FOMO SHORT mode.
AAPL could pull off that ultra expensive toy of a headset but I doubt it.

"Our call of the day, also from Citigroup, offers insight on when unraveling of the tech trade could really begin. A team led by Citis global head of quantitative research, Chris Montagu, pointed out that investors have been strongly overweight U.S. stocks versus all other regions, even cutting some bullish momentum for Japan equities (JP:NIK), up 24% so far this year.

Positioning is the most extreme in Nasdaq futures where investors also are sitting on very extended profits. This could lead to rounds of profit-taking in the near term, Montagu told clients in a note on Monday.

As Montagu explains, investors extended net long positions, or bets that prices will rise, in both S&P and Nasdaq futures in the latter half of May. This bullishness was driven by large-cap growth and caused the Nasdaq to become more extended than the S&P, they said....
Not only is Nasdaq positioning the most extended ever seen by the model (going back more than 12 years), but profit on these long positions average 7.6%, which is a level where the probability of rounds of profit-taking increases significantly. The average profit for S&P long positions is small by comparison at just 2.7%. said the Citi team.

From another angle, Brent Donnelly, president of Spectra Markets and author of Alpha Trader, said in a tweet that bitcoin weakness seen on Monday (more below in Chart of the Day) could be a possible canary in the NASDAQ coal mine at this point, as he suggested a related play on AI superstar Nvidia (NVDA).

You could do worse than taking a shot at short NVDA here with equity seasonality turning negative, NVDA in a clear range (and on a huge island 375/425) + TGA refill, tighter Fed, and continuing QT likely to matter at some point soonish, he writes.

Remember, NVDA and bitcoin used to be joined at the hip before the AI bubble and bitcoin used to often move before NVDA. They decoupled as crypto mania turned to AI mania but are still both part of the same broad ecosystem of supertech disruptor etc, said Donnelly, who offers up the below charts."

[dTraderB]

No way! ISM report indicates softening.
FED on PAUSE, HOLD, MODE permanently until time to CUT.

"GOLDMAN SACHS: THE FED IS MOST LIKELY TO ADD A 25BPS RATE HIKE IN JULY TAKING THE TERMINAL RATE FORECAST TO 5.25% - 5.5%."

[dTraderB]

Longview Economics (@Lvieweconomics) tweeted at 7:11 AM on Tue, Jun 06, 2023:

Low levels of put protection for the NASDAQ 100 at the moment...a pretty accurate short-term SELL signal over the past few months!

https://t.co/zDgpoLiXgd
(https://twitter.com/...7789622272?s=03)

[12SPX]

Not much to say as this raging bull,,,,, not,,,,, remains overbought, expensive, call options way to pricey and puts worthless overall, bond yields high, bullishness the most rampant of the year, volatility at a new lows etc etc etc yet overall were not really up "that" much.  This little rally has been resilient I will say lasting almost a whole week now whew lol,,,,but I'll stick to my grind mode as the Nasdaq really has been the only index that has really rallied.  I hear they have a new name for the AI stocks calling them the "magnificent seven" and If that's not a warning sign I don't know what is though lol!!  As you know I mostly concentrate market sentiment on the actual prices of options and as were now in the final two weeks of this expiration cycle, call prices are at extremes now as we approach my upper cycle numbers.  Any type of sell off will bring these prices back to reality so I'll watch and see what happens.  Anyhow, still also have my short average at 4250 so we'll see what today brings.  

[K Wave]

Starting to look like a successful defense of 1800 on Rusty...

 

The rotation may be under way

[K Wave]

Watching this turn attempt on DAX closely....

 

IF bulls are successful, then may be on the way to longer term breakout...otherwise Cherry on Top still a possibility on a solid breach of 15900....

 

 

 

[K Wave]

DAX cash....Islands In The Sky are always worrisome unless they get taken out....

 

[K Wave]

this battle right here at 16K might decide it all on DAX