Trading Blog: TnT Group

I mentioned this link in my webcast and it is pasted below. I wanted to say thank you to P_Ambrus on Twitter for shooting me over this link.

http://ftalphaville.ft.com/blog/2011/02/03/478326/the-ecbs-code-words/

It is a great outline of Trichet’s rhetoric and how the ECB has acted after Trichet has used specific words, including “Strong vigilance” and “Heightened alertness”.

Very interesting article so make sure and take a look at it no matter if you trade the European session or the US session.

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.

Below is a small article out of irishtimes.com where Mohamed A El_Erian of PIMCO briefly mentions Ireland possibly leaving the Euro including the possibilty of others as well. The Euro spiked 60 ticks when the article came out and from 1:00 a.m. to now, 3:45 a.m., the euro has been consistently making new lows for the night.

Also, Mohamed A El-Erian’s overall view on Europe and his belief that other European countries will soon follow to take money out of the bailout fund.

http://www.irishtimes.com/newspaper/breaking/2010/1205/breaking6.html

Good afternoon everyone.  This Mark and I am back from vacation. Lets look at today’s market.

To start we had Trade Balance, Initial Jobless and Continuing claims at 7:30 this morning.  Initial Claims came out a little better 451,000 vs and expected 470,000. Continuing Claims came out a little worse 4478K vs 4450K.  Later in the day we had a 30Y bond auction. The yield came in at 3.82.

The stock markets liked the 7:30 numbers the ES (mini Futures) rallied from 1103.50 to 11120.00. I had 1107.50 ( 200 day moving average) and 1114.50 as resistance. They have since come all the way back. Bonds did not do much on the number. They sold off some but came right back. The bond auction came out at a yield of 3.82 and that made the 30Y bond sell off. They are down 16/32 since the auction.

Levels I am paying attention to………..

The ES (mini Future) is sitting near its 200 day moving average at 1107.50. If we have a daily settle above this level I think the market can trade higher. My next big level of resistance is 1129.50.

The Euro still has resistance at 129.32.  If we were to settle above this level it could make a push for 131.77 area.

Good Luck Trading

This is Brian Tehako giving you my daily blog on the market.

I want to Thank Andy Turner for taking over my blog yesterday.  His blog was short and sweet…. But right to the point that leads right into my blog

The EURO/ YEN.  Holy crap did it get hammered overnight and continued through the early morning.  Being a macro trader I believe in the movement in money moves all markets.  This shift of money is unreal in the Euro/Yen.  In my trading career I have not seen the Euro/Yen in these areas it made this morning.

Yesterdays settle was 912 in the Euro/Yen.  It made a low today of 646.  With these levels here and we did make a nice bounce back above 800, but these equity markets could see a 10% drop easy, 20% probable, and maybe even back to our lows from 09/10.  I know this seems crazy…… But I still believe that the currency moves started the FLASH CRASH….. If  so……. We will BREAK HARD!!!

One thing I also noticed today that was very strange was the metal sectors.  Silver was really strong on the bounce in equities.  Silver was strong, then Gold, and Copper was really weak.  Keep one eye on that Silver in these moves…. Gold should stay stronger…. If it doesn’t, you may want to start bottom feeding on these equities.  It happened today and worked.

EXISTING HOME SALES……….. OHHHHHHH BOY…… IT WAS BAD!!!!!

We were looking for 4.65M and -13.4%.  It came out 3.83M and -27.2%.  You cant get much worse(15 year lows).  Equities hammered and debt continued it’s extreme BULL market.

Richmond Fed came out suprisingly a little better.  We were looking for 8, and it came out at 11.  That took me for a little bit of a surprise, but it is such a small number.

Going into the close today:

DON’T BUCK THE TREND.

Stay short equities

Stay long debt

THE TREND IS YOUR FRIEND.

Check out my live spot today on Fox Business News around 2:10 Central Time.

Remember…… No drinking and Trading!!!

Good afternoon everyone. Lets look at the day so far.

We had Initial Jobless Claims come out +12,000 to 500,000. This is a nine month high and the trend looks to be heading in the wrong direction. Later Philadelphia Factory Index came out at -7.7 it was expected at +7. The bulls once again can not be happy with these numbers.

As one would expect once the numbers came out risk trades were taken off. Stocks and oil sold off and bonds did what they do almost everyday and that’s rally.

Levels I am paying attention to……..

The ES (mini Future) put in a double top at 1098.50 and once it got below 1083.75 the target was 1068.00. We traded down to 1068.50. Looking at this chart today I think this 1064.00 to 1050.75 is a very important area. A weekly settle below 1050.75 could open up a test of the lows at 1002.75.

The Euro so far has held its 127.54-31 area. For now I have resistance at 129.32. A daily settle below 127.31 would open up the 125.31 area to be tested.

Good Luck Trading

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 everyone. This is Mark and I am filling in today on the blog. With the dollar screaming higher today, everyone is taking off there risky trades. Both European and U.S. stock markets are down, the euro has done nothing but sell off all day and is currently down over 300 pips. Oil has followed the stock market lower and as one would guess bonds are sitting near there highs of the day.

Levels I am paying attention to……..

With the Russell 2000 (mini future) settling below 647.70 yesterday my target is 615.50. The low so far today is 620.10.

With the S&P (mini future) holding 1129.50 I thought it could trade down to 1063.00. Looking at the charts today the 1084.00 level will be some support for the market. If this level can not hold 1063.00 would be next.

On Aug 6th the Euro future traded its 200 day moving average. It has sold off since then and the first daily support I have for it is 127.54 – 127.31 area.