Tag: fang+ index

Euro (March)

Session close: Gained nearly a penny

Fundamentals: Today’s U.S Core CPI was better than expected by one tenth for both YoY at 1.8% and MoM at 0.3%. But guess what, the Dollar lost more than 0.5% on the session and 1% from its swing high. Along with CPI was a very poor read on Retail Sales; headline came in at -0.3% and Core at 0.0%, both missing by 0.5%. This immediately sparked the stagflation argument. First, we want to put stagflation to rest for now as this is the first sharp drop in spending while CPI has been essentially trending lower for the last 18 months. However, yes this raises the fear gauge on stagflation and this coupled with extremely strong technicals in the Euro and extremely weak technicals in the Dollar has encouraged a directional move today. Earlier this morning Eurozone GDP was in line with expectations while Industrial Production was much stronger. Tomorrow is Eurozone Trade Balance data at 4:00 am CT. ECB members Praet and Lautenschlaeger speak at 4:45 am CT and 6:00. U.S PPI is due at 7:30 am CT along with weekly Jobless Claims, NY Empire State Manufacturing and Philly Fed. Industrial Production is due at 8:15 am CT.

Technicals: Today’s outside bullish reversal and move out above major three-star resistance at 1.2434-1.2436 has added fuel to our Bullish Bias. The longer it stays above here the more bullish the tape becomes. The 9-day moving average crossed below the 21-day only yesterday and today’s reversal signals a rejection. The next major level to watch from here is 1.2508-1.2514 and this now aligns with a trend line from the highs.

Bias: Bullish

Resistance: 1.2434-1.2436***, 1.2508-1.2514**, 1.2608***, 1.2695***, 1.30***

Support: 1.23805**, 1.2209-1.2222***, 1.2112-1.21405***, 1.2003***

 

Yen (March)

Session close: Gained about half a penny

Fundamentals: The Yen is moving higher not only on weakness in Asian equity markets but on a deep-seated sentiment shift. There is clear speculation that the Bank of Japan will catch up with other central banks and tighten or taper policy later this year. The hesitance in reappointing BoJ chief Kuroda has been an understated catalyst. It is also likely that a reduced carry trade has added support. On the other side of the coin, extreme Dollar weakness as mentioned above has helped the Yen trade to the highest level since November 2016. Japanese GDP missed expectations last and halted the rally before it was reinvigorated in U.S hours following CPI and Retail Sales. Core Machinery Orders is at 5:50 pm CT and Industrial Production is at 10:30 pm CT.

Technicals: Price action is in a melt-up for the Yen and the bullseye is major three-star resistance, our only level above. The session low was .9285 and this now aligns with .9279 to bring support, a close below here will not only neutralize this rally but potentially begin to signal a failure; longs must manage risk to this point.

Bias: Bullish

Resistance: .9480-.9491***

Support: .9279-.9285**, .92015**, .9154-.91665**, .9113**, .9062-.9075***

 

Aussie (March)

Session close: Gained about half a penny

Fundamentals: Today was a massive whipsaw in the Aussie Dollar upon the release of U.S CPI data. In the end, the Aussie put in a strong session and has seen tremendous strength today along with the commodity sector and Dollar denominated assets. However, the day is just getting started in Australia and Employment Change data is due 6:30 pm CT. Analysts expect an addition of 15,300 jobs.

Technicals: Today’s session finished with an extreme outside bullish reversal. The session low held major three-star support and closed out above major three-star resistance. Nine times out of ten this is an all systems go buy signal. However, today is that one time and traders must keep an eye on Employment Change. We are Bullish in Bias and will remain so outright as long as tonight’s data does not flop.

Bias: Bullish

Resistance:.7991**, .8046-.8051***, .8135-.8151****

Pivot – .7901-.7915***

Support – .7868**, .7733-.7757***, .7640**

 

Canadian (March)

Session close: Gained about half a penny

Fundamentals: Like the other three currencies mentioned, the Canadian put in an extremely strong session on U.S Dollar weakness. This has been a very quiet week on the data front out of Canada, but tomorrow is ADP Employment at 7:30 am CT which is a private read on the heels of last week’s hideous government read. Also, tomorrow Bank of Canada Governor Council Member Schembri speaks at 12:30 pm CT. Crude Oil also reversed sharply from its session low and the EIA inventory report was not bearish. With the price of Oil back above $60 for now this should be supportive to the Canadian.

Technicals: Price action did not settle above resistance at .7996-.8006 but it made its way into this level ahead of the electronic close. Watch for this area to hold through the end of the week to confirm a bottom. Today’s outside bullish reversal is very positive and we have been adamant that we are long term bullish the Canadian with a target of .8524 before the end of the year. Today’s session low was .7908 and we will adjust major three-star support to align with here; a move back below this level will signal a failure.

Bias: Bullish

Resistance – .7996-.8006**, .8070**, .81195-.8163***, .8290***, .8524****

Support – .7931-.7949***, .78805**, .7752-.7787***

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

 

Cattle Commentary: Cattle futures finished the session mostly higher, though well off of the highs for fats and feeders. April live cattle finished the session up .275 at 124.90, trading in a range of 1.325. March feeder cattle finished the session up .225 at 146.95, trading in a range of 3.325. Friday afternoon we got some new news across the wires in the form of cash trade and the Cattle on Feed report. The bulk of cash trade was reported at 127 and 200 dressed, this was up 4 and 5 respectively. Majority of market participants we spoke with were expecting to see 126. Fridays Cattle on Feed report showed the following:

 

Cattle on Feed: 108

Range of Estimates: 107.2-108.1

Average Estimate:107.7

 

Placements: 101

Range of Estimates: 93.3-100.3

Average Estimates: 96.9

 

Marketing’s: 99

Range of Estimate: 97.9-100.3

Average Estimate: 98.6

 

This afternoons boxed beef prices were up slightly.

PM Boxed Beef / Choice / Select

Current Cutout Values: / 206.83 / 201.83

Change from prior day: / .06 / .51

Choice/Select spread: / 5.00

 

Cattle Technicals

Live Cattle (April)

April live cattle futures finished gaped higher to start the week, marking the high print in the opening minutes as price action fizzled out for the remainder of the day. The overall price action for the session was neutral but we continue to believe there is opportunity at the top end of the range to consider selling, whether that be reducing long exposure or legging in on shorts. If the market fails to break out above resistance in the coming sessions, it is likely that we see long liquidation take prices back towards first support which comes in from 122.475-122.75. If the bulls do achieve a breakout, the next resistance pocket comes in from 127.20-127.35.

Resistance: 125.20-125.35***, 127.20-127.35***, 130.10****

Support:122.475-122.75***, 120.20-120.625****, 117.90-118.70****

 

Feeder Cattle (March)

March feeder cattle saw some volatility on the open, as we saw a “surprise” gap higher with prices testing our “last line of defense” from 149.40-150.00. The market was not able to hold water at those levels and that led to some pressure for the remainder of the day. If that market fails to gain traction here in the first half of the week, we could see selling pressure come back into the market and press us towards first significant support which we have marked as 143.25-143.50. As with the fat cattle, we continue to feel that this is an opportunity to consider the sell side regardless if you are bullish or bearish (reduce longs/initiate shorts).

Resistance: 147.75-148.00***, 149.40-150.00***, 153.95*****

Support:145.80-146.45***, 143.25-143.50****, 142.10-142.60**, 139.85-140.125***

 

Lean Hog Commentary & Technicals (April)

April lean hogs finished today’s session down .50 at 73.30, trading in a range of .90. Supply side fundamentals continue to lend hand to keeping a lid on a significant rally. Technical resistance from 76.225-76.40 held last week and will continue to be the significant pocket to keep an eye on. On the support side, the market is making a run towards the 100-day moving average which comes in at 72.80. A break and conviction close below opens the door to accelerated selling pressure which could press prices towards the bottom end of the range which we see coming in from 70.625-71.15. This pocket represents The November lows and the 200-day moving average.

Resistance: 74.00-74.375**, 76.225-76.40**, 77.25****

Support: 72.80**, 70.625-71.15***, 67.75-68.00****

 

Euro (March)

Session close: Settled at 1.24265, down 33.5 ticks

Fundamentals: The Euro began working lower late Friday afternoon and continued on that path through today’s session. This slow and steady drip eludes to traders taking positions off the table at the beginning of a pivotal week that has the State of the Union Tuesday night, Fed decision Wednesday and Nonfarm Payroll Friday. U.S PCE Index data was in line with expectations today. Tomorrow morning brings Eurozone GDP at 4:00 am CT along German CPI. U.S Case Shiller is due at 8:00 am CT and Consumer Confidence at 9:00. Both fundamentally and technically, the Euro has more upside in the long-term.; we believe pullbacks are buying opportunities However, traders do want to manage risk properly through what is expected to be a volatile week. Do not forget to read out Tradable Events this Week.

Technicals: Price action is attempting to relieve itself from overbought conditions. The 14-day RSI reached 75 last week. The CoT showed traders expanded the already record long position in the Euro by 25% in the week ending January 23rd. The Dollar Index is bouncing from the most oversold on the weekly since November 2007. To the downside we have first key support at 1.2349-1.23685 and today’s session low of 1.2374 was kept in check by this level. Though we remain long-term bullish, we would rather be buyers closer to major three-star support at 1.2209-1.22135.

Bias: Neutral/Bullish

Resistance – 1.2514**, 1.2608***

Pivot – 1.2434-1.2436***

Support – 1.2349-1.23685**, 1.2307*, .2209-1.22135***

 

Yen (March)

Session close: Settled at .92035, down 23 ticks

Fundamentals: The Yen retreated slightly today, but given recent volatility and today’s Dollar strength, this was a solid session for the currency. Still, we are concerned that Wednesday’s Fed meeting can bring a hawkish surprise and near-term pressure for the Yen. Furthermore, the Yen is attempting diverge from falling Treasury prices but if the Treasuries are lower because of the Fed, the Yen is likely to take similar heat. In a week that will center around U.S political and monetary policy, there are some key data points out of Japan to watch. Household Income and jobs data is due tonight at 5:30 pm CT. BoJ Core CPI is due out at 11:00 pm CT. Tomorrow night is going to be a volatile one for reasons more than just the State of the Union with Japanese Industrial Production data along with Chinese Manufacturing.

Technicals: The Yen has finally picked itself up out of the gutter but faces a tremendous hurdle this week in maintaining its recent gains. Price action is showing signs of fatigue just below major three-star resistance. This level will be extremely critical and a close out above here on the week should spark the next bull leg higher. While we see first key support at .9164, we would rather be buyers against major three-star at .9089-.91035.

Bias: Neutral/Bullish

Resistance – .9237-.9255***, .93215**, .9480***

Support – .9164**, .9089-.91035***, .9043*, .8998-.9006**, .8946-.8957**

 

Aussie (March)

Session close: Settled at .8101, down 18 ticks

Fundamentals: The Aussie has gained more than 8% since its December bottom and as the year unfolds there is room for further gains. For now, we believe it should be most vulnerable to a strengthening Dollar and domestic data this week. First, last week’s CPI read out of its neighboring New Zealand missed widely and we will be watching tomorrow nights Aussie CPI read that will be accompanied by Chinese Manufacturing data (China is Australia’s top trade partner). Tonight, there is Business Confidence data at 6:30 pm CT.

Technicals: Price action traded to a high of .8135 on Friday, the highest level since May 2015 before paring gains. Pullbacks in the Aussie over the last two months of been extremely shallow and the trade is overdue for a sharp move. The weekly RSI is testing the level in which it hit last September, when it traded at this price, this is the highest since 2011. We believe that if the Aussie can chew through major three-star support at the .8033-.8037, the door will open for it to trade down to .7874-.7881.

Bias: Bearish/Neutral

Resistance – .8100-.8125***, .8151*

Support – .8033-.8037***, .7998**, .7962**, .7874-7881***

 

Canadian (March)

Session close: Settled at .81195, down 2 ticks.

Fundamentals: The Canadian stayed in a very tight range through the session as NAFTA talks wrapped up with a positive vibe. We look to a busy week of U.S political and monetary policy to be the key catalyst in price action but at the same time traders need to keep an eye on Chinese Manufacturing tomorrow night and major Canadian data points Wednesday; monthly GDP data and Raw Materials Price Index. We are very bullish the Canadian in the long-term and hope to see it about 1% lower this week on the U.S Dollar consolidating higher from oversold territory to present a strong buy opportunity, rather than down on negative news out of Canada.

Technicals: Price action is holding strong against major three-star resistance at .81005-.81195. One concern technically, is trend line resistance from July 2014. However, like the Aussie did against a similar trend line, we believe the Canadian can get out above here in due time and this can ultimately spark a move to .8524. We would like to see price action dip to .7931-.7949 in order to present the aforementioned buying opportunity.

Bias: Neutral

Resistance – .81005-.81195***, .8163**, .8290***, .8524****

Support – .80505-.8057**, .7996**, .7931-.7949***, .7903**, .7752-.7787***

 

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

 

E-mini S&P

Yesterday’s close: Settled at 2853.50

Fundamentals: The 10-year Treasury yield notched above 2.7% yesterday, a level in which many have called for to spark volatility in equity markets. Our biggest concern with rising yields is the velocity in which they move; a slow grind may not be as troublesome to equity markets while fast spikes higher are more likely to cause pressures. This move in yields is coming from all around the globe. The German 10-year bund yield traded to the highest since November 2015 at just about .7%. While the Chinese 10-year has been around 4% since November, it spiked firmly though that benchmark over the last week and a half. Treasury prices are the inverse of yields and last night the 10-year Treasury extended losses early in the session, this was enough to push the S&P through a key support level and encourage further selling ahead of the busiest of weeks. With more than 100 S&P companies reporting earnings this week, the State of the Union tonight, a Fed policy decision tomorrow and Nonfarm Payroll Friday, it only makes sense for investors to take something off the table at these levels. Eurozone GDP data was in line with expectations this morning while minor components that accompanied the read missed the mark. German CPI data is due at 7:00 am CT. U.S Case Shiller is due at 8:00 am CT and Consumer Confidence follows at 9:00. Lets also not forget Chinese Manufacturing this evening during the State of the Union.

Technicals: Price action tested into our key support at 2851.75-2852.50 early yesterday with a low of 2854.50 and bounced firmly to 2868.25; between the 50% and .618 but also a level in which the sell-volume had come in at earlier on the open. After finishing the session back to this support level, it broke below here last night, and we believe this opens the door for selling down to 2807-2808.50 and the major three-star level we now have below there at 2798. Last night’s low of 2831 held the crucial level at 2825.50-2828, one in which we had as three-star support last week. However, now that the trend line is taken out, we view this level as less strong. This is now a trading environment and can be played from both sides, the bears have an edge this morning though sellers are better off positioning closer 2847.75-2849.25; a move above here will neutralize this immediate-term weakness while a close above 2854.50-2854.75 will help the bulls regain an upper-hand. Only a close back above 2858-2860.50 will turn this immediate-term bullish once again.

Bias: Neutral

Resistance – 2847.75-2849.25**, 2854.50-2854.75**, 2858-2860**, 2878.50**, 2887***, 2920***

Support – 2825.50-2828**, 2807-2808.50**, 2798***

 

Crude Oil (March)

Yesterday’s close: Settled at 65.56

Fundamentals: Crude Oil saw pressure early in the overnight with a strengthening Dollar and ahead of inventories coming into the picture. The Dollar move is so far short-lived as it has turned south this morning, bringing support. Early estimates on the EIA inventory read are for a build of 100,000 barrels. However, API is after the bell today and last week’s API came in at +4.755 mb while the EIA read was a draw and more in line with expectations. It would not be surprising to see API give a bullish read this week relative to expectations. This could ultimately set up for a sell opportunity upon the EIA release. The Dollar will remain in play all session and through this evening on the State of the Union, a strengthening Dollar puts pressure on commodities while continued weakness brings support. Chinese Manufacturing is due at 7:00 pm CT.

Technicals: Price action settled at first support yesterday, this will be a key level that the bears must keep the tape suppressed below. We have maintained a slight Bearish Bias and a lower high below 66.66 and our major three-star level at 66.87 has opened the door for the sellers. Ultimately, as we said yesterday, we need to see a close back below previous highs and support at 64.72-64.89 in order to neutralize this recent push higher. Furthermore, to turn truly Bearish we need to see a close below the $63 area; the market is extremely overbought, and we believe the crowded long position will begin to bail at this level.

Bias: Neutral/Bearish

Resistance – 66.87***, 68.43**

Pivot – 65.45-65.61

Support – 64.72-64.89**, 64.26**, 63.70*, 62.78-63.00***

 

Gold (April)

Yesterday’s close: Settled at 1345.1

Fundamentals: This consolidation lower in Gold is less about long-term fundamentals and more about near-term positioning due to data, the Fed and the pendulum effect. First with the data, Case Shiller is due at 8:00 am CT while Consumer Confidence is due at 9:00; this is just the beginning for the week as we have ISM and Nonfarm Payroll. Second, the Fed and the pendulum effect are more intertwined. Gold bottomed after a dovish Fed hike in December that had two dissenters. Since, inflation has been stable but not much higher and they are not expected to hike tomorrow. However, as we have discussed at length in many of our articles, there is a great unwind going in the Dollar and Euro trade as well as the Dollar against many of its other pairs; the Fed is not the only central bank tightening. Additionally, it is firmly believed that the White House does not want a strong Dollar. This pendulum has swung too far, at least in the very near term. Ultimately, the likelihood of a hawkish Fed statement is increased and for that reason we are cautious Gold in the near-term. Lower price action should bring a tremendous buy opportunity.

Technicals: Yesterday we said we could not make the case to buy Gold until support at 1329.1-1331.9 is tested. Last night’s low was 1337.5 before the Dollar began weakening once again. With key data points today and the State of the Union tonight which are both expected to swing markets, we remain cautious and await a more attractive area to reposition.

Bias: Neutral

Resistance: 1349.7-1351.4**, 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1329.1-1331.9**, 1321.7***, 1307.6-1312***

 

Natural Gas (March)

Yesterday’s close: Settled at 3.167, 13 cents from its session low

Fundamentals: Natural Gas is surely making it difficult on both the bears and the bulls. The bears are having it a little tougher though. After gapping lower Sunday night, price action worked higher through the second half of yesterday to nearly finish in the green. Storage drawdown expectations from last week, reported this Thursday have increased slightly but are not enough to justify such a reversal. The February contract expired and fell off the board yesterday, for now we chalk this up to repositioning and will be watching today’s settlement closely on a technical basis.

Technical: Price action is above major three-star resistance at 3.181-3.197 and this begins to Neutralize our Bias slightly. Today’s settlement will be key, and we must see it fall back below here. There is minor resistance at the 3.27 level but 3.32 will be in play on a close out above major three-star resistance. Price action could not get below first key support yesterday, but a failure to do so should not have sparked such a strong reversal.

Bias: Bearish/Neutral

Resistance: 3.27*, 3.32**

Pivot: 3.181-3.197***

Support: 3.035-3.054**, 2.943***, 2.865**, 2.786**

 

10-year (March)

Yesterday’s close: Settled at 121’26

Fundamentals: Treasuries around the world have been under pressure. The 10-year achieved 2.7% yesterday and essentially again last night on the Asian open as it traded to a new low before reversing. However, as we discussed in the S&P section, many are calling for this level to put pressure on equity markets; debt will cost more to service and older and more cautious investors will begin to find bonds attractive as yields rise with equity valuations at these levels. The week is just beginning, and volatility will be here to stay through Nonfarm Payroll Friday. Case Shiller is due at 8:00 am CT and Consumer Confidence is at 9:00. German CPI just fell short of expectations and this could work to support Treasuries if we don’t get hot reads from the U.S, especially if equity markets remain weak.

Technicals: Support is thin in this area but building at the 121’17-121’18 area. Price action managed to claw back a close above our 121’25 first support level yesterday. We have maintained a Bullish Bias for now but as a reminder this is a contrarian play as we believe prices and sentiment are exacerbated at this level in the near term. Since early last week, we have said that we like positioning long through last week’s central bank meetings and this week’s Fed.

Bias: Bullish/Neutral

Resistance – 122’15-122’175**, 122’26-122’29***, 123’10**

Pivot – 121’31-122’015

Support –121’25**, 121’17-121’18**, 119’20-120****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

Happy New Year!

  1. Hi-Ho Silver!

For the third week in a row, Friday’s Commitment of Traders showed a net-short position in Silver (week ending Tuesday 12/26). The last time Silver had a net-short position was the week ending July 18th. In July, Silver bottomed on the 10th and began a rally of $3 or 20%. Since bottoming on December 11th Silver has rallied about $1.50 or 10%. Friday’s session settled at major three-star resistance; a trend line from the September highs and the 200-day moving average. Since the CoT report is as of Tuesday, the short-covering rally likely began on Friday. However, we believe the rally is just getting started and to further support our belief we have a seasonal trade. If you have bought Silver on January 5th and have held through February 14th, you have made money in 13 out of the last 15 years, averaging a gain of just about $1 ($5000 in a regular sized Silver contract). For us, this seasonal trade aligns perfectly with a breakout above major three-star resistance and a run of the same distance as July’s.

  1. Crude Oil

Crude famously reached a high on the first trading day of the 2017 and closed the session nearly $3 from there. Its selloff extended 8% and nearly $4.50 over six sessions. For the next month, the bulls positioned for Crude to make a run at $60. They compiled a record net-long position of 405,328 contracts in February but never took Crude higher. The January 3rd high was finally taken out on November 3rd. The bulls have been in complete control for more than two months, just as they were last year. Furthermore, pipeline outages in the North Sea and Libya have helped send prices higher. The bulls have amassed a near record net-long position through December and Friday’s Commitment of Traders shows it at 404,238, the highest since that February read. When it reached that height in February the market then sold off 14.5%. With both pipelines coming back on line this week we are looking for a similar setup to last year. If everyone has already bought, who is left to buy.

  1. Euro/USD

This is a big week for the currency pair with the Euro finishing at the highest level since September. We have been outspoken Euro bulls and we believe the September 8th high will be taken out in the first quarter. There’s no better way to start the year than with a session like Friday and a week like this ahead. From the U.S we FOMC Minutes from the December rate hike on Wednesday and Nonfarm Payroll on Friday. But there’s much more with ISM Manufacturing on Wednesday and ISM Non-Manufacturing on Friday. Also, Fed officials grab the horn Thursday and last through Friday. From across the pond there is reads on Manufacturing Tuesday morning, German and Spanish Unemployment Wednesday, Services Sector reads Thursday, German Retail Sales early Friday along with Eurozone CPI and PPI. 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

Euro (December)

Session close: Settled down 64 ticks at 1.18495

Fundamentals: The biggest U.S Consumer Confidence read since November 2000 added to early pressure on the Euro. Jerome Powell did comment about normalizing rates, but we didn’t get anything unexpected. North Korea fired a ballistic missile this afternoon and the Euro began seeing pressure right around this time. However, shortly after this, the Senate committee passed the tax-reform bill which moves it to a full vote later this week; supportive to the Dollar. Tomorrow is another busy day with French GDP and Spanish CPI early before German CPI data at 7:00 am CT. New York Fed President Dudley speaks at 7:30 am CT along with the revision of Q3 GDP. Current Fed Chair Yellen testifies to congress on the state of the economy at 9:00 am CT and Pending Home Sales are due out then. German Bundesbank President Weidman speaks at 11:00 am CT and San Francisco Fed President Williams at 11:45 am CT. The Beige Book is due at 1:00 pm CT. Fresh news each day is driving the tape and Thursday is no slouch either. Right now, the Dollar bulls have an edge as the tax-reform vote comes into focus potentially Thursday.

Technicals: We remain long term bullish the Euro and though price action took out key support it was not by much. Ultimately, this signals a consolidation lower to the 50 and 100 day moving averages at the next support at 1.1797-1.1823. If this level is achieved, we believe the long-term Euro bulls will begin to show back up at the 1.18 mark and with supportive data we could see a paring of this week’s losses.

Bias: Bullish

Resistance – 1.1921-1.1942***1.19975-1.2019**, 1.2154-1.2180****

Pivot – 1.1866-1.18815**,

Support – 1.1797-1.1823**, 1.1728-1.1730***, 1.1672**, 1.15785*, 1.1481-1.15***

 

Yen (December)

Session close: Lost 46.5 ticks settling at .8969

Fundamentals: This was a disappointing session for Yen bulls on many fronts. Fundamentally, North Korea launched a ballistic missile and the Yen, an expected fear gauge despite the missiles vicinity to Japan, barely pressed higher. U.S tax-reform took precedent and the Yen finished the session on the lows after the Senate pushed their tax bill to a full vote set for later this week. Earlier in the session Japan’s monthly review stated that the economy is continuing to grow at a moderate pace. There have been some clear positives from the economic data side, but the verbiage didn’t lean in that direction. Retail Sales is due out tonight at 5:50 pm CT and tomorrow will be a crucial day with a slew of reads. A very strong day for equity markets also did not help the bull case for the Yen, however, we have been bullish both the S&P and the Yen and see reasons for both of them to rise at the same time.

Technicals: Yesterday’s bull flag failed to follow through, essentially giving up all the gains. Major three-star resistance at the .9045 level has held strong and the band of two three-star resistances has kept price action in check. The 14-day RSI did reach 65 just as it did with the Euro, though this is not truly overbought it is high nonetheless. However, the Yen has so far held much better than the Euro did after reaching this point. Major three-star resistance is now .9018-.9045; a close out above here is needed to squeeze the massive short position. Major three-star support now comes in at .8915 and this level will signal a hold of the recent uptrend.

Bias: Bullish

Resistance – .9018-.9045***, .9119**, .9321-.9359****

Pivot – .8995

Support – .8915***, .8880-.8886**, .8800-.8828***

 

Aussie (December)

Session close: Lost 11 ticks settling at .7595

Fundamentals: The Aussie took a hit along with all currencies against the Dollar but held the second best behind the British Pound. The range was somewhat subdued today as traders key in on a big day of data tomorrow evening for the Aussie along with Chinese PMI’s.

Technicals: With last week’s hold and reversal against support just below here, the .7530-.7550 level is now a three-star support level. The slower consolidation lower is more due to the US Dollar, but price action must regain the .7605-.7607 level to remain constructive.

Bias: Bullish/Neutral

Resistance – .7645-.7678***, .7726-.7755**, .7824**, .7891-.7893***

Pivot – .7605-.7607

Support – .7530-.7550***, .7390****

 

Canadian (December)

Session close: Lost 34.5 ticks on the session settling at .78035

Fundamentals: The Bank of Canada’s Financial Stability Review did not bring any surprises but was upbeat on housing and economic conditions. BoC Governor Poloz continued to express patience in further tightening as they want to wait and see how the moves this summer will impact growth and inflation. The Raw Materials Purchase Index came in stronger than expected this morning, but the Canadian Dollar bled lower on a stronger U.S Dollar.

Technicals: Price action is facing major three-star support head on at .7790-.7803 and it held through today’s session. Holding this level will be key in building a platform to go retest swing highs. However, there was a clear failure with a lower high. The Trend line from the September highs also now comes in as support and aligns with .7790-.7803, the Canadian Dollar is at an inflection point heading into tomorrow.

Bias: Bullish/Neutral

Resistance – .7851-.7856**, .7897**, .7950-.7960***, .8019-.8035**, .8293****

Support – .7790-.7803***, .7730-.7745**, .7671**, 7550***

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/ 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

E-mini S&P (December)

Yesterday’s close: Gained 2.5 on the session finishing at 2582

Fundamentals: As traders monitor the ECB panel this morning with Yellen, Draghi, Kuroda and Carney we also await key inflation data with PPI due at 7:30 am CT. Data out of the Europe was overall mixed this morning with German Sentiment missing the mark but the Eurozone read coming in stronger. GDP was in line with expectations and around 1:30 am CT the Euro traded through major three-star resistance and to the highest level since the ECB meeting on October 26th. Tax-reform remains at the forefront and yesterday Treasury Secretary Mnuchin said that the House and Senate are “very close”. Equity markets keyed off this to work back to unchanged on the session, however, we credit the technical ground work against first support as the driver. All year traders have believed tax-reform will get done, and in all likeliness, it will. The market is more worried about corporate taxes on the surface of this plan and not delaying such. St. Louis Fed President Bullard speaks at 7:15 am CT and new Atlanta Fed President Bostic at 12:05. Chinese data last night marginally missed the mark but ultimately this has gone unnoticed. GDP is due out of Japan this evening.

Technicals: Price action traded to a low of 2570 yesterday and against that of Friday’s. First key support at 2573.50-2574.25 was breached but only for a short period of time just ahead of the NYSE open. Ultimately, the intraday session did not trade below support. Still, resistance at the 2583-2585.75 is also holding strong and the door is still open for the bear camp. If you have traded against this level, you are doing just fine and it is more of a matter of how much you are looking for or maybe you have traded against this level more than once now. We remain Neutral/Bearish but keep in mind we also want to find a place to become Bullish once again.

Bias: Neutral/Bearish

Resistance – 2583-2585.75**. 2594.50-2596**, 2600*, 2616**

Support – 2573.50-2574.25**, 2561.75-2562.25**, 2555*, 2539.25-2543***

 

Crude Oil (December)

Yesterday’s close: Gained 2 cents on the session but did run stops below first support.

Fundamentals: The IEA released their monthly Oil Market Report this morning and cut Crude Oil demand growth for 2017 and 2018. Importantly, they noted the recent rise in prices and question the fundamental backdrop on how the “market balance in 2018 does not look as tight as some would like”. The comments and data noticeably contradicts that of yesterday from OPEC. Price action has begun to weaken, and we maintain that the key this week, more than these reports and most likely more than the EIA (barring a tremendous outlier), is December option expiration.

Technicals: Price action is trading heavily but clinging to first support. As we discussed yesterday, a move to $55 would hurt the most amount of people and this for us is reason enough to believe that it is in the cards. However, once option expiration is over tomorrow we should see renewed buying to finish out the week and into the December contract expiration. A selloff due to option expiration will be a great way to cleanse the over-extended Commitment of Traders which reported the largest long position and net-long position since the week of March 7th where a sparked a 12.5% selloff ensued. We turned Neutral/Bearish yesterday and will remain such as traders must be nimble in this volatility.

Bias: Neutral/Bearish

Resistance – 57.15**, 57.92**, 58.97***

Support – 56.41-56.51**, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

 

Gold (December)

Yesterday’s close: Gained 4.7 on the session to finish at 1278.9

Fundamentals: Gold is fighting against optimism on tax-reform and global growth. This morning the Dollar Index is down .25% but Gold is down .5%. Renewed and revived growth out of Europe has driven yields higher and ultimately Gold can only fight so hard without an outside catalyst. Last week, President Trump’s Asian trip attracted geopolitical speculation but since the tape has suffered. Friday’s volume was the largest since September 21st, the day after the Fed hiked rates. Much of this was due to a large sell order but these large orders can also dictate sentiment for a few sessions. A key read on inflation is due out with PPI at 7:30 am CT this morning; a miss here would reinvigorate the bull camp. St. Louis Fed President Bullard speaks ahead of it at 7:15 am CT. The ECB panel continues through the morning. New Atlanta Fed President Bostic speaks at 12:05 pm CT and the week is only getting started.

Technicals: We discussed the significance of major four-star support and though yesterday’s tape began to consolidate, renewed weakness is pressing into this level once again. We have now begun to Neutralize our bias. We remain long term bullish but must also be aware of the market pulse. We are now Neutral/Bullish and if PPI comes in better than expected, we would suggest that longs still holding on get out of the way for a few rounds.

Bias: Neutral/Bullish

Resistance – 1280.5-1281.6**, 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support – 1262.8-1270.6***, 1243.6*

 

Natural Gas (December)

Yesterday’s close: Settled down at 3.167

Fundamentals: The colder weather is here and New York is now flirting with freezing temperatures. Natural Gas is in a consolidation phase until there is further proof that stockpiles were drawn down and to what degree after price action got a little ahead of itself last week.

Technicals: Price action is under pressure this morning trading losing as much as 8 cents overnight. First key support is holding at 3.08 but we expect the consolidation to continue and the chart is technically damaged in the very immediate term (a session or two). We now look for key support at 3.035-3.051 to play a big role in fixing the tape off a consolidation. If the bears take it below gap support at 2.984-2.998 then we have a near term failure on our hands.

Bias: Bullish/Neutral

Resistance – 3.179-3.198***, 3.22**, 3.297-3.353***, 3.55**, 3.67**

Support – 3.08**, 3.035-3.051** 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

10-Year (December)

Yesterday’s close: Settled at 124’20

Fundamentals: Data out of Europe didn’t surprise much this morning and was for the most part in-line with expectations. Furthermore, neither has the ECB panel as central bank heads have more or less discussed support for their actions. Prices have sold off ahead of U.S (and global) inflation data this week which begins today with PPI at 7:30 am CT. Though the action could be attributed more to the likeliness that tax-reform gets figured out, today’s PPI data and tomorrow’s CPI remain a clear wildcard and poor reads here will reinvigorate a weak tape. However, a surprise beat will work this market below 124 and retest the lows from earlier this year.

Technicals: Price action has clung to the 124’19 level though it traded to a low of 124’16 overnight before consolidating higher ahead of PPI. The technicals will be at the mercy of the data over the next two sessions. However, this is where the settlements become key in the momentum trade.

Bias: Neutral

Resistance – 124’31-125’015**, 125’19**, 125’255**, 126’01**, 126’15***

Support – 124’19**, 124’00**, 122’22 – 122’29***

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

 Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

 

NYSE FANG+ Index

From theice.com

The NYSE FANG+ Index

 

INDEX COMPOSITION: BENCHMARKING TODAY’S TECH GIANTS

The NYSE FANG+ index includes 10 highly liquid stocks that represent the top innovators across today’s tech and internet/media companies. The index’s underlying composition is equally weighted across all stocks, providing a unique performance benchmark that allows for a more value-driven approach to investing. While the performance of indices weighted by market capitalization can be dominated by a few of the largest stocks, an equal-weighting allows for a more diversified and represented portfolio. NYSE FANG+ is one of the most highly correlated indices to technology and related stocks.

UNDERLYING STOCKS IN NYSE FANG+*

Facebook
(FB)

Apple
(AAPL)

Amazon
(AMZN)

Netflix
(NFLX)

Google
(GOOGL)

Alibaba
(BABA)

Baidu
(BIDU)

NVIDIA
(NVDA)

Tesla
(TSLA)

Twitter
(TWTR)

Real-time index calculations are available to help you benchmark the core group of stocks included in the index, and official open and close prices are published daily on the NYSE Global Index Feed.

REVIEW THE FULL INDEX METHODOLOGY HERE

TRADING NYSE FANG+ INDEX FUTURES ON ICE: THE BENEFITS

NYSE FANG+ futures, which will begin trading on ICE Futures U.S. on November 8, 2017, subject to regulatory review, provide a concentrated hedging mechanism for asset managers, proprietary trading firms, institutional traders and retail investors with technology exposure. The contract features:

Low-cost exposure to tech sector

One of the most highly correlated indices to tech and related stocks

Hedging mechanism to quickly increase or decrease tech exposure in equities portfolios

A disciplined methodology that will dictate the evolution of underlying securities

NYSE FANG+ INDEX PERFORMANCE COMPARISON 
(Hypothetical performance using backtested data)

Based on back-tested performance data, the combination of stocks in the NYSE FANG+ Index have returned a 28.44% annualized total return from September 19, 2014 to September 15, 2017, as compared to 14.89% for the NASDAQ 100®, 9.86% for the S&P 500® and 16.80% for the S&P 500® Information Technology Index.

Calculations are based on the price return of each index. NYSE FANG+ is an equal-weighted index, whereas the other indices represented in the chart above are weighted by market capitalization.

Description

NYSE FANG+™ is a new index providing exposure to a select group of highly-traded growth stocks of next generation technology and tech-enabled companies. The futures contract on the index is designed to offer the ability to gain or reduce exposure to this key group of growth stocks in a capital efficient manner.

Market Specifications

TRADING SCREEN PRODUCT NAME

FANG+ Index Futures

TRADING SCREEN HUB NAME

ICUS

SYMBOL

FNG

CONTRACT SIZE

$50 times the NYSE FANG+ Index

CONTRACT MONTHS

4 contracts in the March, June, September and December cycle

PRICE QUOTATION

Index points, to two decimal places

TICK SIZE

.10 Index points, equal to $5.00 per contract; calendar spread trades may be executed at .05 index point increments.
(Block Trades can be done at .01 Index points)

LAST TRADING DAY

Third Friday of the expiration month. Trading in the expiring contract ceases at 9:30 am NY time on Last Trading Day.

DAILY SETTLEMENT

16:14 to 16:15 NY time

FINAL SETTLEMENT

Cash settlement to a special calculation of the NYSE FANG+ Index (Price Return version) based on the opening prices of the component stocks on the Last Trading Day for the contract.

POSITION ACCOUNTABILITY

Position Accountability Level – 20,000 lots in any month.

POSITION LIMIT

Position Limit – 100,000 lots in all months combined.

DAILY PRICE LIMIT

None.

BLOCK TRADES

Yes, 20 lot Block Minimum Quantity

EFPS AND EFSS

Yes.

IPL LEVELS

IPL Amount: 2000 Index Points
Recalc Time and Hold Period: 5 seconds

NCR AND RL

NCR 3.00; RL 7.50; CSLOR 2.00 Index Points

EXCHANGE FEES

Screen Trades: $1.00 per side
Block and EFRP Trades: $1.50 per side

MIC CODE

IFUS

CLEARING VENUES

ICUS

For more information please contact DAW Trading at info@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

 Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.