Trading Blog: TnT Group

Good morning all. I hit on this a litle bit in my webcast. I wanted to go a little more in depth about it though. When I left for vacation over the holidays I left a gold and S&P market that seemed to be somewhat correlated. To say it was a great correlation would be an absolute lie. However it seemed like gold was being traded solely as part of the commodity basket and was rising with oil, copper, rubber, etc which was also followed slowly but surely by equities and the free money that was being pumped into them.

Now after my first day back from vacation and stepping back into these markets it seemed as if there was a definite change of scenery. Overnight gold was getting hit harder than Brett Favre’s head on the frozen field in Minnesota while equities, continuing there impressive day from yesterday, gradually rose higher (as I type S&P 500 Minis are up 4.25 trading 1269.50 while gold is down 14.7 trading 1408.2). This was not a small divergence from what had been happening before I left. This was a farely large change of thought. Are people or the markets now thinking, more than we have in a while, that the economy may be on track?

Below is a daily chart showing the somewhat correlated gold and S&P markets and the slight divergence over the last few days.

The overnight session really made me think that way. We had a ton of risk on trading happening. Minis up 4.25, euro trading up 30 some pips, yen getting hit farely hard down 87 pips, debt (both US and European) down a good amount, and gold getting clobbered. Oil had a tough time doing anything overnight. I understand it. Do they want to rally it because of equities rallying and a slight sell off in the dollar or is it confused because gold is getting pounded. It eventually rallied slightly, as it should if the markets are showing signs of adding risk and the outlook being somewhat positive.

Below is a 5 minute  chart of last night session and the distinctive inverse relationship of gold and Minis.

I am not coming out and saying that our economy is back on track and let the jobs rain down from the heavens. I still whole heartedly believe we are nowhere near where we need to be. My point is to keep an eye out for this inverse type relationship as it will tell a story as to risk on or risk off trade. It is hard to deny how these markets moved last night and is something to pay close attention to moving forward into this new year.

Spyder here,

Mark is on vacation for the next few weeks so I will be chiming in for the days he usually writes on the markets.

Overnight seemed to look pretty tame and stayed the same early into the morning. Things seemed to really pick up around 7:00 however. To me it felt as if it was a pretty volatile session.  Jobless Claims came out +473K which was better than the expected +490K  with Continuing Claims coming at at 4456K after an expected 4495K. Now these numbers came out better than expected which the markets took positively, rallying equities to new highs. However, one of the traders that came on CNBC made a very valid point; these economists are beginning to realize the negativity within our economy and are lowering their expectations on these numbers. So a number, such as this Jobless Claims, which beat expectations, it may solely be because of the lowered expectations in the surveys that are given. Markets may have taken that to heart as equities came off the rest of the morning. S&P Minis as I am typing down 2 dollars on the day.

Taking a look at the commodity markets we had a big move up in copper even with the weakness in equities.  Oil, which once again seems to have a mind of its own most of the time, kept with that MO again today. Seemed weak when the equities were on the highs. When equities came off and went negative oil seemed to be strong. Ultimately you can make money in that market but its all about timing and if you are in it too soon you are as good as dead.

I think looking at the bigger picture you still need to be short equities. One of the risk currencies, the New Zealand Kiwi, has stayed below a daily trend and broken the 6996 level in which it needed to stay above to keep the trend higher.

With that being lower, as shown below, and the Euro/Yen Cross at the level it is at, as Brian has talked about, I think that longer term play is just to be short equities. Not to mention the unstopaBONDS where they are at!

Good luck trading!

Andy Turner here on a Monday.

The dollar is looking to hold onto the gains it made late Friday in after hours trading.  Although stock index futures were higher going into the open, those gains were quickly erased.

Oil gave some signs of life too but finally rolled over with the dollar holding the 83 even area.

I wanted to see the S&P mini test the 1103 area last week but it doesn’t look like that is in the works anymore.  Add in the fact that the Euro/Yen cross looked  like it would test the lows made in June today, it makes me think this is a very sick market and we will be testing the aforementioned 1050 before 1103 trades again.

justin here…here is the summary for wednesday’s trading day.

on a light economic news day, we saw more of the same in the debt futures, new contract highs. oil dropped today to its lowest level on an increase in U.S. supply. the oil inventory number came out a little mixed which caused a slight bounce off of its lows. we saw pressure on the commodities throughout the morning and with it a drop in equity indexes.

levels i like for tomorrow

long 13226 in the 30 yr bonds.

long 12508 in the 10 yr notes.

long 7261 in the oil,  short 7694

long 12751 in the euro

To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown – the first instinct is to eliminate these distressing states. First principle: any explanation is better than none… The cause-creating drive is thus conditioned and excited by the feeling of fear ……. Friedrich Nietzsche

Hi.  I am Andrew Turner and will be posting every Tuesday about the day’s events.

So I am sure everyone is asking what’s UP with the dollar?  Well almost everything is up with the dollar continuing its steep decline again today.  Notably, oil and debt are up sharply.

Oil continues its move up today trading above 82.50.  Last time we settled above 82 was May 13th when the S&P (mini future) settled 1152-50.   US  Ten-Year Notes set contract highs as well.

I expect this trend of higher prices with a falling dollar to continue.  The Fed has so far failed to inflate the economy and has brought the specter of deflation to the table. Don’t be fooled by rising prices with a declining dollar!  The economy will continue to be weak in the midterm.

My name is Brian Tehako.  I am owner / trader at the TnT Group.  As a group we will be blogging on a daily basis to give people an inside view of what our group looks at and does.  Every Monday I will be blogging during my lunchtime to give you what I saw from 6 am till now…..  and what I think will be happening into the close.

Please feel free to comment on any of our blogs.  You can also catch me on twitter everyday giving my market commentary live.

Today was my first day back from a one month vacation.  The volotility over that month seemed to be lackluster, and I did not regret missing that much time.  My group explained to me that the markets were defined as pop and drops.  That means that a market would pop and drop one way fast and then grind sideways until the next pop or drop.

This really defined what todays market was also.  I am not sure why this is happening, but I am sure it is due to the major ATS influence in the market.

The question is…..  “How do we take advantage of it???????”

Hopefully we can figure this out soon……. Because it is hard to grind money out, unless you are on these moves.

Overall though, equities were really strong when I came in the morning at 6 am.  From 6 am till 9 am the market was in a sideways bull chop.  At 9 am ISM manufacturing and prices paid came out bullish for equities.  Also construction spending came out bullish for equities also.  This just solidified the overnight rally and the March continued.

At about 9:45 am I tweeted that we like being short US equities and OIL below 81.45.  We still like taking these positions into the close today.  The OIL position hit half of our target the popped right back above 45.  We lightened up on the position and will hold small shorts.

A couple things did not make sense to me today.  The first is why such a strong US Dollar sell off, and why did Gold blip up $5.00 in the morning.  I think they possibly go hand and hand………  But took me by surprise, and I dont know what these products mean for anything else.

I would really like to see E MINI SP’s settle below 1115.00 and I think its a great short for the week!!!!!

Have a great day……. Remember……. No drinking and trading!!!