Good evening, will keep it very short as I am closing down for the weekend and will write a the more detailed trade report Monday.
As far as the trading today the Non Farm Payrolls was a bit of a non event.
I had expected more movement. That yesterday's low 1147 level held to the downside (day session) today and we tested that high end of the last week range at 1164 towards the close. Could not break 1164 and closed 1060.50, up 4 points on the day.
Average volume trading 1.963m in the E-mini today. The 1 hour chart looks potentially toppish.
I would like to note one thing, saw fair amount of voluming coming in on the cash close trading 89k in ES contracts on the 5 min bar, closing on the low, showing clear selling action. That is weakness and might impact Monday's overnight (Globex) session and I expect the S&P to open lower Monday in the day session then 1161.
That was the highest volume 5min bar the whole week.
See chart image: http://chart.ly/ialtcho
That is just my prediction, but what do I know?
Some key levels for next week, see this chart: http://chart.ly/xrbykdf
today's Mr Top Step: http://mrtopstep.com/category/video/
Have a great weekend everybody, take care
Daily blog with thoughts and comments on the futures and forex markets through the eyes of Per-Erik Karlsson, Ceo at Avantage Financial, Switzerland.
fredag 8. oktober 2010
Thursday 7th of October
S&P futures spiked higher on the weekly jobless claims data and tested that 1163 key resistance level (high from 12 of May), which is the highest level after the flash crash on 6th of May. However it failed at the level and traded all the way down to 1147 in the next 3 hours, but it was no real drive in the volume on the move lower and it move back higher towards the close and closing pretty much unchanged at 1156.50. Good rally back off that 1147 and we are all looking to tomorrows payrolls.
The key resistance levels for tomorrow are 1163.50 and 1168, to the downside we have 1147 (today's low) and 1127 the key high volume area.
Trading wise the portfolio was down 0.77% on the day and the major problem was that I lost 13.50 points in the futures as I was too much long hedged on the dropped lower.
On the options portfolio I bot back the rest of the 1120 Oct 15th puts from 4.30 to 4.50 points. Also bot back some 1130 October 15th puts around 4.30 for that one as well. Bot back a tiny 1155 call for October for 10.50 points and did sell a 1150 October 15th call when we dropped lower as I was a bit too long.
That is all for now, have a nice day
The key resistance levels for tomorrow are 1163.50 and 1168, to the downside we have 1147 (today's low) and 1127 the key high volume area.
Trading wise the portfolio was down 0.77% on the day and the major problem was that I lost 13.50 points in the futures as I was too much long hedged on the dropped lower.
On the options portfolio I bot back the rest of the 1120 Oct 15th puts from 4.30 to 4.50 points. Also bot back some 1130 October 15th puts around 4.30 for that one as well. Bot back a tiny 1155 call for October for 10.50 points and did sell a 1150 October 15th call when we dropped lower as I was a bit too long.
That is all for now, have a nice day
Wednesday 6th of October
Fairly tight range today in the S&P E-mini futures and we had an inside day, trading inside the previous day's range. Total range was 7.75 points.
Very little trading today and was even for the day trading wise. However as the time decay played nicely in my favor the portfolio was up 1.16% on the day.
No changes made to the options today. Nothing more to report really, everybody is looking forward to Friday's Non Farm Payrolls report at the moment and following the weak ADP number today it seems given that the number will be weak, just depends how much is priced in.
Looks like everything is highly correlated at the moment, with Gold rising as long as rates stay low (10 year US Treasury note) and Euro following Gold.
Have a nice day, take care
Very little trading today and was even for the day trading wise. However as the time decay played nicely in my favor the portfolio was up 1.16% on the day.
No changes made to the options today. Nothing more to report really, everybody is looking forward to Friday's Non Farm Payrolls report at the moment and following the weak ADP number today it seems given that the number will be weak, just depends how much is priced in.
Looks like everything is highly correlated at the moment, with Gold rising as long as rates stay low (10 year US Treasury note) and Euro following Gold.
Have a nice day, take care
Tuesday 5th of October
S&P futures basically traded up for the whole day, only down bar on 1 hour chart was the last hour. ES gapped up 8.75 points on the open and never looked back and the successful test down at 1127 yesterday proved correct today. ES closing up 20 points on the day and now trading at the top of the recent range and have trend channel resistance at 1154.
Trading wise I was not enough long today in the futures to hedge the short calls and the portfolio fell by 2.3% on the day. Made 5.34 points on the futures side and made a series of changes to the options portfolio.
Bot back some of the 1120 puts for October exp, not worth risking a downside break and the options coming back into play, so closed some at 3.75 points.
Also bot back some Nov 1150 calls and sold 1170 and 1180. Bought back 1140 calls and sold some 1150 puts for 15 October expiration to hedge some of the negative delta I have.
To be honest I had been looking for a bit more decisive action around this 1153 level, but seem to hanging around this 1120 to 1153 range for a few weeks now.
That is all for today, take care
Trading wise I was not enough long today in the futures to hedge the short calls and the portfolio fell by 2.3% on the day. Made 5.34 points on the futures side and made a series of changes to the options portfolio.
Bot back some of the 1120 puts for October exp, not worth risking a downside break and the options coming back into play, so closed some at 3.75 points.
Also bot back some Nov 1150 calls and sold 1170 and 1180. Bought back 1140 calls and sold some 1150 puts for 15 October expiration to hedge some of the negative delta I have.
To be honest I had been looking for a bit more decisive action around this 1153 level, but seem to hanging around this 1120 to 1153 range for a few weeks now.
That is all for today, take care
torsdag 7. oktober 2010
Monday 4th of October
The S&P futures trading down 7.5 points, but found support down at last weeks low 1127 level and closed well off the low, which indicates some buying, otherwise it would have flushed through the close.
Another thing to note is that the volume was lower than 2 previous bars and it was unlikely to break that 1127 low on reduced volume. Remember that the key volume areas we have are 1127 and 1153.50. The low looks like a successful test, see link:
http://chart.ly/y43ytwm
To the trading,
lost 13 points on the futures trading as I was hedging the long calls I had to have some long exposure on the drop. Still ended the day up 1.24% on the day as the short calls declined more in value that the what I lost on the futures.
In the options portfolio I made some minor changes, bot back some of the short 1150 calls for October and also sold 1135 call for expiration Friday to get a bit more premium in.
That is all for today, good luck
Another thing to note is that the volume was lower than 2 previous bars and it was unlikely to break that 1127 low on reduced volume. Remember that the key volume areas we have are 1127 and 1153.50. The low looks like a successful test, see link:
http://chart.ly/y43ytwm
To the trading,
lost 13 points on the futures trading as I was hedging the long calls I had to have some long exposure on the drop. Still ended the day up 1.24% on the day as the short calls declined more in value that the what I lost on the futures.
In the options portfolio I made some minor changes, bot back some of the short 1150 calls for October and also sold 1135 call for expiration Friday to get a bit more premium in.
That is all for today, good luck
mandag 4. oktober 2010
Friday 1st of October
Welcome to the 4th Quarter, normally the best 6 months period for stock market is from November through April. Regarding October, historically has been the 7th best month for the Dow, stocks rising 57 % of the time since the index was founded 113 years ago.
The S&P futures had an inside day today, trading inside the previous day's range and the today's range was 12 points (1134.50 low to 1146.50 high)
Trading wise I mainly concentrated on trading the expiring weekly contracts on ES, selling calls puts on the 1140 level for expiration today and hedging in the futures and we went up and down the range. I made about 2 points in the futures and good amount in the options and ending the 0,86% higher on the day.
The only change I did outside of the expiring options for today was to sell some 1140 calls for 8 Oct. and some 1130 puts for 8 Oct. that I trade out of the start of next week. Received 19 points for selling that spread.
I also bot November 79 put in Crude oil (CL) (for expiration October), paying 0,90 to 0,91 for the trade.
Would like to remind that the key levels in ES are 1153.50 and 1127.25, basically the week's high and lows, important levels for next week as those are the levels to break to make a more directional move. Still have that gap down at 1105.75 also that I have noted down as possible downside target.
That is all for now, take care.
The S&P futures had an inside day today, trading inside the previous day's range and the today's range was 12 points (1134.50 low to 1146.50 high)
Trading wise I mainly concentrated on trading the expiring weekly contracts on ES, selling calls puts on the 1140 level for expiration today and hedging in the futures and we went up and down the range. I made about 2 points in the futures and good amount in the options and ending the 0,86% higher on the day.
The only change I did outside of the expiring options for today was to sell some 1140 calls for 8 Oct. and some 1130 puts for 8 Oct. that I trade out of the start of next week. Received 19 points for selling that spread.
I also bot November 79 put in Crude oil (CL) (for expiration October), paying 0,90 to 0,91 for the trade.
Would like to remind that the key levels in ES are 1153.50 and 1127.25, basically the week's high and lows, important levels for next week as those are the levels to break to make a more directional move. Still have that gap down at 1105.75 also that I have noted down as possible downside target.
That is all for now, take care.
fredag 1. oktober 2010
Thursday 30th of September
The S&P emini futures broke above the key 1150 resistance level right at the start of the floor trading session and failed at 1153.50 where we saw a lot of volume coming in. It traded more than 122k contracts on the 5min break out bar and also did 573 contracts the first hour. All that volume was selling of course and late longs got sucked into the market and short got stopped out, then the market reversed lower and we did drop 21.25 points in 2 hours after the break and made a low at 1131.25 and then traded more or less sideways for the rest of the day.
A note that I saw when looking over the 60min chart is that the reversals this week all was made when we had more than 500k contracts traded on the ES on the hourly bar.
Link to chart image here: http://chart.ly/o56eppa
One thing I want to say on the selloff Thursday is that the price action and volume towards the close was not that bearish actually. If it was really bearish we should have seen strong selling towards the close and break below 1127 in my opinion.
We now have 2 major areas to watch, 2 levels we saw those two major reversals of this week, which are; the 1153.50 to the upside and 1127.50 to the downside. Keep those levels in mind going forward?
Trading wise I was forced to buy the break to protect the short calls I have on and I was a bit slow to close the long, so in the futures I lost 6 points.
However since I was less long then my negative delta when the market dropped the day turned out quite well in the end. Made 1.17% on the day all in.
Options wise I did the following trades:
I bot back the 1100's puts for October at 5.75 points, was quite cheap and no point risking that option coming back into play if this move higher reverses.
I really don't want to leave very low value out of the money options open as they can hit me if we see a big move. I rather buy them back and sell another strike with much higher premium closer to the market price.
I also bot back some 1140 calls for October on the break higher to reduce my negative delta and instead sold 1150 and 1160 for October when the move started to fail. I did also sell calls at 1180 for Nov, getting around 18.50 to 19 for those.
When we trade back below 1135 I also added some 1080 puts for November for 18 points, so balance the negative delta a bit.
I still think we have a good chance at going lower before we break above 1160, but we need to close below 1127 next few sessions to go lower. Simply put one can say that above 1127 the bias is bullish.
today's Mr Topstep: http://mrtopstep.com/2010/09/30/ffffade-away-day/
That is all for today, have a great day, take care
A note that I saw when looking over the 60min chart is that the reversals this week all was made when we had more than 500k contracts traded on the ES on the hourly bar.
Link to chart image here: http://chart.ly/o56eppa
One thing I want to say on the selloff Thursday is that the price action and volume towards the close was not that bearish actually. If it was really bearish we should have seen strong selling towards the close and break below 1127 in my opinion.
We now have 2 major areas to watch, 2 levels we saw those two major reversals of this week, which are; the 1153.50 to the upside and 1127.50 to the downside. Keep those levels in mind going forward?
Trading wise I was forced to buy the break to protect the short calls I have on and I was a bit slow to close the long, so in the futures I lost 6 points.
However since I was less long then my negative delta when the market dropped the day turned out quite well in the end. Made 1.17% on the day all in.
Options wise I did the following trades:
I bot back the 1100's puts for October at 5.75 points, was quite cheap and no point risking that option coming back into play if this move higher reverses.
I really don't want to leave very low value out of the money options open as they can hit me if we see a big move. I rather buy them back and sell another strike with much higher premium closer to the market price.
I also bot back some 1140 calls for October on the break higher to reduce my negative delta and instead sold 1150 and 1160 for October when the move started to fail. I did also sell calls at 1180 for Nov, getting around 18.50 to 19 for those.
When we trade back below 1135 I also added some 1080 puts for November for 18 points, so balance the negative delta a bit.
I still think we have a good chance at going lower before we break above 1160, but we need to close below 1127 next few sessions to go lower. Simply put one can say that above 1127 the bias is bullish.
today's Mr Topstep: http://mrtopstep.com/2010/09/30/ffffade-away-day/
That is all for today, have a great day, take care
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