06/29/2022 ES Trade Plan Worksheet

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Jun 292022
 

Consumer Confidence dropped to 98.7 in June as concerns about high gas and food prices, (i.e. inflation) increase.  The level is the lowest in over a decade.  The reading conveys a larger risk of recession, kind of a self-fulling prophesy; if consumers slow buying, the economy hurts and a recession is possible.

Tesla (TSLA) is down premarket after announcing they laid off about 200 hourly workers of their auto pilot system.  It’s likely Tesla will need to make many more cost cuts as China’s Covid shutdown and Tesla’s losing “investment” in bitcoin impact the company’s finances.

Disney (DIS) shares are up premarket after the Disney board decided to renew CEO Bob Chapek’s contract by 3 years.  Chapek has steered the company through tough times; the pandemic and fights with the Florida governor.

Pinterest (PINS) shares are up over 5% premarket after news CEO and co-founder Ben Silbermann will leave the company to make way for former Google executive Bill Ready.

Premarket earnings include BNED, BBBY, GIS, MKC, and PAYX.

The economic calendar includes GDP @ 8:30am ET and Oil @ 10:30am ET.

Fed speakers include Powell @ 9:00am ET and Bullard @ 1:05pm ET.

Volatility remains elevated and ticked up from Tuesday’s selloff.

Whale bias is bullish into the US session open.

 

 Posted by at 7:34 am

06/28/2022 ES Trade Plan Worksheet

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Jun 282022
 

The ”bullwhip effect” is starting to show up in corporate earnings which should lead to a turn down in inflation.  The “bullwhip effect” is when companies over-react to customer demand, over-order inventory which trickles down to wholesalers and manufacturing supplying or creating more products, using more resources which drive resource prices up.

The companies then build too much inventory which will need to be discounted to sell since it costs more to store the inventory than to sell at a discount.  We’re seeing drops in metal, commodities, and energy prices as a result.

Oil and Cotton have fallen sharply since their peaks.  Lower oil prices should trickle into lower gasoline prices over the next several weeks, but current prices will impact June CPI numbers.

China cut their quarantine time down for inbound travelers from 14 days to 7 days.  China had no new Covid infections on Tuesday.  Markets are viewing this as good for business in the world’s second largest economy.

Morgan Stanley (MS) is up premarket after they became to first big bank to raise dividends after passing the Fed’s stress test.  Goldman Sacs (GS), Wells Fargo (WFC), and Bank of America (BAC) are all expected to raise their dividends.

Nike (NKE) is down premarket after warning higher transportation costs and the stronger US dollar will hurt profit margins.  No corporate earnings of note for Tuesday.

The economic calendar is full with Trade Balance and Wholesale Inventories @ 8:30am ET, HPI and S&P/Case-Shiller 20-City Composite @ 9:00am ET, and Consumer Confidence and Richmond Fed Mfg Index @ 10:00am ET.

Volatility continues to drop as we enter the summer doldrums where volatility and volume drop as traders take vacations.

Whale bias is bullish but on light overnight volume.

 

 Posted by at 7:21 am

06/20/2022 Juneteenth Federal Holiday

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Jun 202022
 

Ok, I’ll admit that I totally forgot about this new Federal holiday and went to work as usual this morning… On June 17, 2021, Congress passed legislation making June 19th a Federal holiday called Juneteenth National Independence Day. The date marks the day that Union General Gordon Granger’s June 19, 1865 proclaimed that Texas was freed from slavery. Texas, along with other Southern states had outlawed Abraham Lincoln’s Emancipation Proclamation. This year, the first Federally recognized Juneteenth falls on Monday, June 20. US stock markets are closed today.

 Posted by at 6:52 am

06/05/2019 ES Trade Plan Worksheet

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Jun 052019
 

Fed Chair Jerome Powell reinforced Fed’s James Bullard’s remarks that trade wars with China, Mexico, and the EU put a dark cloud over the US economy.  Powell said yesterday “as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”  Fedwatch now places the probability of a interest rate decrease at 53% for July.

Presidential candidate Sen. Bernie Sanders will be crashing Walmart’s annual meeting at the invitation of WalMart workers.  He expected to push Walmart to raise wages higher than the $11/hour minimum wage.

Earnings today include FIVE, AEO, GILL, CPB, CLDR, SFIX, MDB, and UNFI.  The economic calendar is full with focus on the 8:15am EST ADP and 10:00am EST ISM Non-Manufacturing PMI.  Also on the calendar are Final Services PMI @ 9:45am EST, Oil @ 10:30am EST and Beige Book @ 2:00pm EST.

Fed speakers include Vice-Chair Clarida @ 9:45am EST and Bowman @ 10:00am EST.  Volatility is up again due to yesterday’s Fed induced rally.  US stocks had their largest move in over 5 months.  Size bias is long into the US session open.

 

 Posted by at 6:08 am

06/04/2019 ES Trade Plan Worksheet

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Jun 042019
 

A Fed rate course reversal???  St. Louis Fed President James Bullard said yesterday that a “darkened” global trade narrative could slow the growth of the US economy, followed by a “downward policy rate adjustment may be warranted soon.”  The bulls sent US stocks up into yesterday’s cash close.

Markets will be watching Fed speak closely this morning: John Williams @ 8:30am EST and Chair Jerome Powell @ 9:55am EST.  CME futures predict a 50% chance of a rate cut in July with 2 more before 2020.  That would be quite a reversal in Fed policy…

FAANG companies are in US lawmakers’ crosshairs.  A House Judiciary committee announced a top-to-bottom review of US tech companies and the DOJ and FTC announced they would tackle large monopolistic companies such as Alphabet, Apple, Amazon, and Facebook.

Dem David Cicilline of RI said “The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today…  market power in digital markets presents a whole new set of dangers.”

In the same vein, Apple announced they will be killing iTunes and instead split music, podcasts, and TV into separate apps.  Earnings today include CRM, AMBA, GWRE, CBRL, GME, TIF, LE, HQY, and NAV.

The economic calendar is light with Factory Orders and Constructions Spending @ 10:00am EST.  Volatility continues to tick up and if Powell hints at decreasing rates, the ES could move today.  Size bias is a divergent short into Bullard’s 8:30am talk.

 

 

 Posted by at 6:19 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