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Macro

Stocks Gain in Asia on Positive Lead From US


Morning Briefing November 22nd 2017


Wednesday throws up a very quiet data session in Europe, but there is plenty on offer from the US, as the releases are front-loaded due to Thursday's Thanksgiving holiday.

 

The morning is free of data in the UK and Continental Europe.

 

At midday, all focus turns to Westminster, when Prime Minister Theresa May answers questions from Parliamentarians in the regular PMQs session. At 1240GMT,

 

Chancellor of the Exchequer Philip Hammond will stand to deliver his Autumn Statement.

 

Across the Atlantic, the US calendar gets underway at 1330GMT, with the publication of the latest Jobless Claims data and the October durable goods orders.

 

The level of initial jobless claims is expected to fall by 9,000 to 240,000 in the November 18 employment survey week after a 10,000 increase in the previous week. Claims were at a level of 223,000 in the October 14 employment survey week. The four-week moving average would rise by 1,500 in the coming week as the 234,000 level in the October 21 week drops out of the calculation, assuming the MNI forecast is correct and there are no revisions.

 

Durable goods orders are expected to rise by 0.5% in October after a 2.0% gain in September. Boeing orders fell slightly to 64 from 72 in September, suggesting nondefense aircraft orders could slow modestly, but remain strong. Orders excluding transportation are expected to rise 0.4% after a 0.7% gain in September.

 

At 1500GMT, the final November Michigan Sentiment Index will be released.

 

The Michigan Sentiment index is expected to be revised up modestly to a reading of 98.1 in November, but remain well below the 100.7 reading in October.

 

Back in Europe, at 1500GMT, the European Commission publish the latest consumer confidence indicator.

 

The weekly US DOE crude stocks data will be published at 1530GMT, with the natural gas stocks data expected at 1600GMT.

 

The Fed will publish the latest FOMC minutes at 1900GMT. Late US data sees the preliminary Treasury Allotments data cross the wires at 2000GMT, with the Fed's Weekly M2 Money Supply Data at 2130GMT.

 

Happy Thanksgiving to all our US readers!.


Global Economic Trading Calendar


 

Markets


SNAPSHOT: Below gives key levels in the 2nd half of the Asia-Pac session: - Nikkei 225 up 128.1 points at 22544.28 - ASX 200 up 28.479 points at 5992 - Shanghai Comp. up 17.166 points at 3427.664 - JGB 10-Yr future up 14 ticks at 151.16, JGB 10-Yr yield down 0.9bp at 0.024% - Aussie 3-Yr future down 0 ticks at 98.06, 3-Yr yield up 0.2bp at 1.926% - Aussie 10-Yr future up 3 ticks at 97.46, 10-Yr yield down 2.8bp at 2.52% - US 10-Yr future up 2+ ticks at 124.24+, US 10-Yr yield down 0.17bp at 2.3542%

AUSSIE BONDS: The Australian Office of Financial Management (AOFM) sells A900mln of 2.25% May 2028 bonds, issue #TB149.  - Average Yield: 2.5746% (prev. 2.7273%) - High Yield: 2.575% (prev. 2.73%); Allotted at high yield: 99.3% (prev. 0.9%) - Bid/Cover: 4.1611 (prev. 5.2967)

US TSY/RECAP: Treasuries ended Tues mixed after a choppy day: initial short-covering and FX-tied buying gain then later profit-taking and FX-tied sales, holiday-tied position tweaks.

US TSYS: T-Notes seeing a slight bid in Asia, last up 3 ticks at 124.25. Move higher comes after comments from Fed Chair Yellen strike a slightly more dovish tone. Yellen noted there was a risk of getting stuck with below target inflation and that she expected inflation to move up over the next year or two but this outlook was uncertain.

BOJ: The BoJ buys total Y960bln of JGB's from the market, all sizes unchanged from the previous operation- Y250bln of 1-3 Year JGB's- Y300bln of 3-5 Year JGB's - Y410bln of 5-10 Year JGB's

US EURODLR FUTURES: Short end unchanged, holding lower range from yesterday. Long end of the strip retracing move lower yesterday. Thin volumes and quiet trade ahead of Thanksgiving Holiday on Thursday.

STOCKS: Stocks are in the green in Asia, stocks took a positive lead from the US where all major indices hit record highs. In Japan the Nikkei 225 is up 171 points at 22,587, the index opened higher and has moved in a narrow range throughout the session. Volumes have been thin ahead of the Japanese Labour, Thanksgiving holiday and US Thanksgiving on Thursday. On the Nikkei 225 10/11 sectors are in the green, led higher by resurgent energy stocks as WTI rises back towards the $58/bbl handle- In China the Shanghai Comp is up 17 points at 3427, while in Hong Kong the Hang Seng is up 264 points at 30,088 - above the psychological 30,000 level and hitting the highest level in over 10 years.

OIL: Oil is higher in Asia-Pac trade, WTI last up $0.90 at $57.74. Oil was grinding higher throughout the EU/US sessions on some optimism ahead of the OPEC meeting on November 30. The move up was accelerated after API inventory data showed a 6.36mln bbl decline in crude stocks in the latest week, while stocks at Cushing fell 1.8mln bbls.

GOLD: Gold is lower in Asia-Pac trade, the yellow metal last down $0.52 at $1,280.09. It has been a quiet Asia-Pac session in terms of news flow, volumes are thin ahead of the Thanksgiving Holiday and markets will focus on the release of the FOMC minutes at 1900GMT on Wednesday. - Gold initially rose at the start of the Asia session after some comments from Fed Chair Yellen. - The move higher was reversed as the Asia session progressed and gold heads into Europe just off session lows.

FOREX: The dollar broadly consolidated against its peers in reasonably subdued Asia-Pacific markets. Outgoing Fed-chair Yellen's interview with former BoE governor Mervyn King saw no discernible impact to trading, with the majority of investors said it was well-balanced. Yellen warned against raising U.S. interest rates too quickly, but in the next sentence said that keeping rates on hold for too long also has risks, it could overheat the jobs market. She also said she was uncertain that weak inflation is transitory and the Fed is monitoring inflation very closely. Dollar-yen ranged between Y112.20 and Y112.50. Aussie rose initially to $0.7596, but fell back to $0.7562 as domestic politics and Aussie-yen sales were seen to weigh, South Australia's Kakoschke-Moore became the latest senator to resign over dual citizenship. Meanwhile, Euro-dollar currently trades at $1.1740 and Cable at $1.3254, after trading in respective ranges of $1.1722 to $1.1748 and $1.3234 to $1.3256.

Technical Analysis


BUND: (Z17) Bulls Focused On 163.40-75 Region

*RES 4: 163.75 Bollinger band top
*RES 3: 163.63 High Nov 8
*RES 2: 163.40 High Nov 9
*RES 1: 163.27 High Nov 21

*PREVIOUS CLOSE: 163.19

*SUP 1: 162.82 Hourly support Nov 17
*SUP 2: 162.52 21-DMA
*SUP 3: 162.36 Hourly support Nov 14
*SUP 4: 161.99 55-DMA    

*COMMENTARY: Bulls made up for Monday’s dip with higher daily highs and lows adding to bullish confidence. Bulls remain focused on the 163.40-75 region where Nov highs so far and the Bollinger band top are situated. Bears now look for a close below 162.82 to gain breathing room and below 162.36 to confirm a break of the 21-DMA and shift focus to 161.63-99 where the 55-DMA and bull channel base off July lows are situated. Daily studies are well placed for fresh leg higher.

EUROSTOXX50: O/S Daily Studies Correcting Higher

*RES 4: 3642.10 Low Nov 8 now resistance
*RES 3: 3620.76 21-DMA
*RES 2: 3601.45 High Nov 13
*RES 1: 3591.53 High Nov 21

*PREVIOUS CLOSE: 3579.32

*SUP 1: 3567.07 Hourly resistance Nov 21 now support
*SUP 2: 3519.35 Low Nov 15
*SUP 3: 3511.56 200-DMA
*SUP 4: 3497.29 High Aug 16 now support

*COMMENTARY: Correcting O/S daily studies appear to be impacting with the index remaining supported on dips back towards the 3497.29-3536.21 region where 100 & 200-DMAs are noted. Bulls failed to manage a close above the 55-DMA Monday with a close above 3601.45 now needed to ease bearish pressure and above 3642.10 to return focus to 2017 highs. Bears now need a close below 3497.29 to hint at a move to 2017 lows with below 3467.78 confirming.

Eurex Futures Market Close


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This article is from Eurex Exchange and is being posted with Eurex Exchange’s permission. The views expressed in this article are solely those of the author and/or Eurex Exchange and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Technical Analysis

Soybean (ZS) Retesting Weekly Chart Triangle Resistance


Soybean (ZS) consolidated a 2nd day yesterday following Friday's strong gains, and appears close to completing a symmetrical triangle (on the 4hr and daily chart).  Significantly, ZS is now retesting symmetrical resistance (on the weekly chart).  Note that the triangle resistance in all 3 timeframes coincide roughly with the psychologically key 1000 whole figure level.  With the weekly, daily and 4hr RSI, Stochastics and MACD bottomish, rallying or consolidating recent gains, my bias is increasingly bullish.  I am looking to go long in the green zone (of the daily chart), and am targeting the red zone for Thursday.  The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I set my stops tighter).

 

Soybean (CME ZS Jan18) Weekly/Daily/4hr

 

 

Click here for today's technical analysis on GBPUSD, Cotton

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures and spot FX markets can be analyzed to enhance trading performance. Tradable Patterns’ daily newsletter provides technical analysis on a subset of three CME/ICE/Eurex futures (commodities, equity indices, and interest rates), spot FX and cryptocurrency markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

 

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

 


15438




Options

Vol 411: Short Holiday Trading Week


CBOETV - Russell Rhoads, Director of Education, CBOE Options Institute, discusses December call activity, Vix and global volatility.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies are available from your broker, or at www.theocc.com. The information in this program is provided solely for general education and information purposes. No statement within the program should be construed as a recommendation to buy or sell a security or to provide investment advice. The opinions expressed in this program are solely the opinions of the participants, and do not necessarily reflect the opinions of CBOE or any of its subsidiaries or affiliates. You agree that under no circumstances will CBOE or its affiliates, or their respective directors, officers, trading permit holders, employees, and agents, be liable for any loss or damage caused by your reliance on information obtained from the program. 

Copyright © 2016 Chicago Board Options Exchange, Incorporated. All rights reserved.

This video is from CBOE and is being posted with CBOE’s permission. The views expressed in this article are solely those of the author and/or CBOE and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


15436




Technical Analysis

Technical Take: More Good Times Ahead for Emerging Markets?


Technical Take:

Stocks are ripping higher today and emerging markets are right there amongst the leaders as they have been all year.  The emerging markets ETF (ticker EEM) gapped higher on the open and is currently up 1.5% so far in the session.  Today’s entire range is above the upper Bollinger Band after having bounced off the lower band just four sessions ago.   The EEM ETF is now up more than 36% YTD which is far outperforming the US benchmarks Dow Jones and S&P 500 which are up 19% and 16% YTD.  This is only the second time in seven years in which emerging markets are outperforming the S&P 500, and it may be the start of things to come.  The below ratio chart of emerging markets ETF (EEM) over the S&P 500 Index (weekly period) shows a multi-year downtrend beginning at the peak in October 2010 and bottoming in Q1’16.  This initially was a major low back in 2004 and proved its importance when it held support in December 2016.  Thus what we have is a large, 12-month double bottom pattern following a six year decline.  In August the ratio broke out above the middle of the pattern which has since acted as support.  Now it is just beginning to emerge above its multi-year downtrend line which is often a recipe for accelerating upside momentum.  The long term nature of the pattern suggests a major low is in place and emerging markets have years of outperformance ahead.  

Nasdaq's Market Intelligence Desk (MID) Team includes: 

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.

Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.

Brian Joyce, CMT has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.

This article is from Nasdaq and is being posted with Nasdaq’s permission. The views expressed in this article are solely those of the author and/or Nasdaq and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


15431




Stocks

Nasdaq Market Intelligence Desk - Equity Market Insight November 21, 2017


As of 10:45AM ET:

NASDAQ Composite +1.0% Dow +0.7% S&P 500 +0.66% Russell 2000 +0.9% S&P MID 400 +0.55%

NASDAQ Advancers: 1511 Decliners: 620

Today’s Volume (100 day avg) +7%

 

Equities in the US are higher again this morning, with the Dow up triple digits and the US Dollar Index is up for the 2nd consecutive day for the first time since 10/13. Corporate results remain a positive influence on stocks during the 4th quarter. Previously owned home sales in October were in line with the 3-month average, but have ticked lower throughout 2017. Information Tech (+1%)  and Healthcare (+0.7%) are the best performers this morning, as more than 70% of the S&P 500 is in the green.

  • Existing home sales report was slightly better (5.48) than expected (5.40)  but still weaker vs the same time last year. A combination of high demand to take advantage of attractive loan rates and low inventories has pushed price tags on purchases significantly higher in all US regions over the past year. Tomorrow, the markets will get a basket of data ahead of the Thanksgiving feast, including MBA Mortgage Applications, Initial Jobless Claims, Durable Goods Orders and U of Mich Sentiment.

The complexity of the proposed Tax Bill has economists examining the loopholes and if the middle class is the real benefactor of the reform. According to Bloomberg “Investors in billion-dollar hedge funds might be able to take advantage of a new, lower tax rate touted as a break for small businesses. Private equity fund managers might be able to sidestep a new tax on their earnings. And a combination of proposed changes might allow the children and grandchildren of the very wealthy to avoid income taxes in perpetuity.”

 

Nasdaq's Market Intelligence Desk (MID) Team includes: 

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.

Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.

Brian Joyce, CMT has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.

This article is from Nasdaq and is being posted with Nasdaq’s permission. The views expressed in this article are solely those of the author and/or Nasdaq and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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