05/23/2019 ES Trade Plan Worksheet

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May 232019
 

Hopes for short-term progress in US/China trade negotiations is fading after US Treasury Secretary Mnuchin said there are no scheduled talks, but Trump would meet Xi Jinping at June’s G-20 meeting.  Meanwhile the Japanese companies Panasonic and Toshiba, plus the UK’s ARM Holdings have joined the blacklisting of China’s Huawei Technologies.  Stock in US tech companies like Apple are declining in what’s being called the Tech Cold War is escalating.

Adding political fuel to the fire, the US sent 2 Navy destroyers into the Taiwan Strait as a commitment to a free and open Indo-Pacific.  While the US recognizes Taiwan as independent, China considers the island a sacred part of Chinese territory and will make it a part of “one China” by military force if necessary.  The Taiwan President tried to reassure everyone about the US ships that there was no cause for alarm.  A Chinese spokesperson said Taiwan is the most sensitive issue in China-US relations.

Meanwhile Tyson Foods (TSN) is looking to build a beef-processing plant in Kazakhstan to avoid Chinese tariffs.  The initial investment is $200B but it’s expected to be billions as Tyson looks to supply 5 million tons of beef to China a year.

L. Brands (LB) is up over 12% premarket after reporting their Bath & Body Works store sales increased 13%.  Earnings include BBY, BJ, HPE, HPQ, HRL, ADSK, MDT, SPLK, and DECK.  The economic calendar includes Claims @ 8:30am EST, Flash PMIs @ 9:45am EST, and New Home Sales @ 10:00am EST.

After shrinking for the last few days, volatility has ticked up over the US/China escalating tensions.  Size bias is short into the US session open on lighter than recent Globex Size volume.

 

 Posted by at 6:42 am

05/22/2019 ES Trade Plan Worksheet

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May 222019
 

It’s a Fed day with FOMC meeting minutes released at 2:00pm EST.  The White House continues their unpredictable moves to secure a US/China trade deal.  After easing Huawei Technology restrictions, the NY Times reported the White House is looking to target and blacklist additional Chinese companies.  The Commerce department may require US companies to get approval before supplying parts to world’s largest video surveillance company Hikvison Digital Technology.

Cui Tiankai, the Chinese ambassador in the US told Fox News, “It’s quite clear the US side that more than once changed its mind overnight and broke the tentative deal already reached… So we are still committed to whatever we agree to do, but it is the US side that changed its mind so often.”

Nordstorm (JWN) is down over 9% and Urban Outfitters (URBN) is down nearly 7% after both retailers missed estimates.  Home Depot (HD) reported stronger than expected earnings although the stock barely moved.  Earnings include LOW, TGT, VFC, NTAP, SNPS, LB, and ADI.

The economic calendar is light with Oil Inventories @ 10:30am EST.  Volatility is beginning to shrink as markets continue to wait on US/China trade negotiation information and summer is starting to kick in.  Volatility could dry up into the morning into the FOMC minutes release.  Size bias is short into the US session open.

 

 Posted by at 6:43 am

04/19/2019 Good Friday Holiday

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Apr 192019
 

US stock and futures markets are closed today for Good Friday.  We’ll resume posting on Monday, April 22.  Enjoy the long weekend!

 Posted by at 5:37 am

04/17/2019 ES Trade Plan Worksheet

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Apr 172019
 

Earnings came in strong yesterday with most beating expectations.  The most notable exception was IBM who beat earnings but missed on revenue.  IBM stock is down over 2.5% premarket.  Netflix also beat but lowered forecasts for new subscribers which sent their stock down around 1%.

Qualcomm (QCOM) stock jumped over 20% yesterday and is up another 5% this morning after they announced a settlement with Apple over technology infringements.  Apple will switch to Qualcomm from Intel for their 5G technology.  A few hours after the announcement, Intel announced they were getting out of the 5G modem business.

Earnings focus today include MS, PEP, AA, ABT, USB, BK, LVS, and TXT.

OPEC is holding their bi-annual meeting today.  Economic data includes Trade @ 8:30am EST, Inventories @ 10:00am EST, Oil @ 10:30am EST, and the Fed’s Beige Book @ 2:00pm EST.  The Fed’s Bullard speaks @ 12:45pm EST.

Volatility continues to contract as the bulls try to push higher.  Volatility is most likely to increase to the downside.  Reaction to earnings will set today’s tone.  Like yesterday, Size bias is a divergent short going into the US session open.

 

 Posted by at 6:48 am

12/04/2018 ES Trade Plan Worksheet

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Dec 042018
 

Confusion and doubt are creeping into the markets over exactly what was accomplished during Trump and China’s Xi Jinping over Sat dinner’s trade talks.  The WH economic advisor Larry Kudlow tried to detail specifics from the meeting but only conflicted with trade talk information released by the Chinese.  The start date of the 90-day truce is in question as Kudlow says it’s Dec 1 and China said it was Jan 1.  With no agreement written down and signed, markets are a little nervous.  Meanwhile yields between the 3 and 5-year note have inverted for the first time in over 10 years suggesting that the US economy is slowing.  Nothing of significance on today’s US economic calendar.  The Fed’s Williams holds a press conference @ 10:00am EST.  Earnings include TOL, DG, AZO, MRVL, and HPE.  Volatility remains elevated, however could shrink into today’s US close as US stock markets will be closed National Day of Mourning for former US President George H.W. Bush.  Size bias is short on lighter Globex volume into the US session open.

 

 Posted by at 6:51 am

05/23/2018 ES Trade Plan Worksheet

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May 232018
 

US and global stock markets are a little rattled by Trump comments concerning a scheduled June 12 Singapore meeting with North Korea and US trade war progress with China.  The US and South Korea held a joint military exercise last week and now Trump is saying there’s a good chance the North Korean meeting will not take place on June 12, but still a good chance it will at some point in the future.  About the trade negotiations with China, Trump said it’s “a start” but he was “not pleased” with the progress.  US retailers Target and Lowes missed earnings estimates while jeweler Tiffany & Co. crushed their expectations.  The economic calendar focus is Oil @ 10:30am and Fed minutes @ 2:00pm EST.  Before the main events, we have PMI Composite Flash @ 9:45am EST and New Home Sales @ 10:00am EST.  The ES has pulled back enough where upside volatility should not be hindered as we’ve experienced over the last week.  Volatility continues to contract, but there’s more room to expand now.  Size bias is short on increased Globex volume into the US session open.

 

 Posted by at 7:46 am

05/16/2018 ES Trade Plan Worksheet

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May 162018
 

North Korea is threatening to pull out of a meeting with Trump scheduled for June 12 in Singapore.  The US is pushing for total denuclearization which North Korea continues to balk at.  North Korea issued the statement “If the US is trying to drive us into a corner to force out unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-US summit.”  The US Supreme Court earlier this week lifted a ban on sports betting in New Jersey.  The decision is causing a lot of activity in the sports business world including potential sports-betting mergers and a $2.2B purchase of the NFL Carolina Panthers by hedge fund billionaire David Pepper.  The dollar continues to inch higher as yesterday’s Retail Sales number were solid and expectations are set the Fed will raise rates sooner rather than later.  The economic calendar focus is Permits and Housing Starts @ 8:30am EST, Industrial Production @ 9:15am EST, and Oil @ 10:30am EST.  Earnings today include CSCO, M, JACK, and TWO.  Volatility continues to remain muted with higher probability for a pickup to the downside rather than the upside.  Size bias is leaning long into the 8:30am EST housing numbers.

 

 Posted by at 6:56 am