Trading Blog: TnT Group

Pretty interesting video. This was posted on youtube about a month ago, so many of you may have seen it, but for those that haven’t it is quite interesting. The video may be a bit over the top, however we have seen what can happen in these markets and with everything that the is happening in the world and what our government is doing these results are  not out of the realm of possibility.

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.

Mark here.

We had Initial Jobless Claims today and they came out 434K vs 450K. The number was good for stocks but the ES ( mini future) only managed to rally 2 handles and then sold off on the open.

We have the dollar lower today but the stock markets are also lower. Gold and oil are higher on the day with gold outperforming oil. My only thought is that we have people getting out of positions before this coming Tuesday and Wednesday. I can’t imagine anyone putting on new positions with two trading days left before the elections and the Fed.  There was a 7Y bond auction today and it came out good for the market. Bonds are trading there highs as i type this.

Levels I am paying attention too…….

The ES ( mini future ) has it’s 20 day moving average coming in at 1165.50. I don’t like buying it for the fact that it has moved up with the market trading sideways. I am thinking about selling the ES if we were to have a day settle below it. I still have 1134.75 and 1120.5 as good daily support.

If  the 30Y bonds (ZB) can have a daily settle below 129.05 I think the market can trade much lower.

Did they do QE or not? Did Japan intervene or not?

Rumors and all other types of nonsense are starting to bother the hell out of me.  It’s like a battle back and forth between countries of who swings the lowest.  Impossible to tell who is winning but someone definitely is and easy to get beat up trying to do anything you think is right.  We’re basically back to the, if I sell it here, it’s automatically 10 ticks against me game, you’re right, really right, but having to take on unnecessary risk because of what you did in the market.

In the overnight hours, there was a RUMOR once again, that Japan intervened.  Looking at a chart, the Yen got slammed 150 ticks and much like every move lately, it was right back within the hour.  Kinda like how the US dollar rallied 100 something ticks on China raising rates earlier in the week.  What happens the next day?  Some BS speculative RUMOR comes out about QE and the dollar gives back the entire rally.  I mean, come on man!  What’s real?

Alright, now I can get to what I’m supposed to be talking about.  I think the dollar is cheap here, but again, can’t really get long it long term from fear of getting blown out on a rumor.  Watch Gold, it tells a great story.

Have a good one.

Dollar shelacking once again against the Yen and Euro.  Even with dollar weakness, equities had a hard time holding bid through the morning and eventually came off with the bonds around 10am.  We thought the PPI would have been bad for the long end of the market and what do ya know, the curves end up getting hammered while 30 years make new highs.  Curves continue to stay weak going into the 30 year auction.  *Update*  My boy Ranger Rick Santelli rated the Bond auction a D- and covered the shorts at 13210.  You couldn’t get on the initial sell off, basically sell the low and watch some dork come in bid for 1500, once the order got picked off it got clubbed like a baby seal.

Same story we’ve been preaching for weeks in the commodities.  Dollar down, buy all commodities with both hands, Gold especially.  Wish I could talk more about the Grains but it’s all old news, lock limit bid a few days back.  Took a shot selling some beans at 1193 after the dollar started basing above 76.80.

Copper, well, it’s the copper market.  A little weaker on the day after making new contract highs on it’s stairway to heaven.  Oh yea, unless you’ve been living it up in a mine shaft for the last 2 months, you’d know the Chilean copper guys surfaced yesterday sportin Oakleys with collars popped.  It’s all good.

Have a good one.

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!!!

Greetings all! My name is Justin Diamond and I will be posting the market events each Wednesday.

The dollar sell off yesterday was short lived. We held a small support at 8059 and basically steamrolled higher all morning.  Gold ripped higher as well off of recovery concerns. In my mind, something has to give here. With the dollar rallying, I have to believe that gold will come off at some point. I guess we will have to wait and see.

The U.S. treasuries got hit throughout the morning. That down move may have been triggered by a strong Canadian dollar as well as the Japanese yen getting a beat down.  A move above 9778 in the Canadian dollar created more energy to the upside.

The stock markets continued its death grind higher with a positive ADP employment change and ISM.

Trades I am eyeing tomorrow……

Long  US 30 yrs @ 12719

Long US 10 yrs @ 12314

Long S&P minis @ 1105

Long Eurostoxx @ 2757

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!!!