IB Traders Insight

Global market commentary from Interactive Brokers Group traders and market participants.

Click here for important disclosures

1 2 3 4 5 2 699
2015-09-04 09:56:24

Posted by
IB Securities Lending Desk
Contributor
Securities Lending

Hard-to-Borrow Action: EMB Revisited

On Tuesday we highlighted mounting outflows from the iShares J.P. Morgan USD Emerging Markets Bond ETF (Ticker: EMB – Click here to read Tuesday’s article). The securities lending desk continues to see downward pressure on the EMB borrow rate this morning as new internal supply is satisfying street borrow demand at rates much lower than the previous week.

Chart - One-month chart of EMB

The analysis in this article is provided 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 investments. 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.

2015-09-04 09:17:25

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor
Macro

Stocks Remain Weak Following Tepid Headline Payroll Reading

Heading into the long Labor Day weekend, investors were dealt a curious report from the Bureau of Labor. The headline gain of 173,000 new jobs was most certainly below par. The estimate from Bloomberg before the release called for a gain of 217,000 jobs. However, a net two month revision of 44,000 to prior data appears to be a healthy offset and one that in part dragged the headline unemployment rate down to 5.1% and to its lowest since April 2008. The latest August reading failed to prove that job growth was slowing down on a sustainable basis. Manufacturing jobs saw a net loss of 17,000, somewhat consistent with the direction of the latest ISM survey, but still inconsistent with overall growth in the goods sector. Likewise, while the pace of both retail and business hiring was lower than usual, it was robust within education and leisure sectors. And government hiring at the state and local level provided a significant yet atypical boost of 31,000 jobs to the headline reading. Overall, slightly weaker, yet not so much that the FOMC can justifiably balk from lifting rates when it meets later in September. Stock futures remained significantly lower over ongoing global equity problems while bond prices pared gains on the dip in the rate of unemployment.

Chart – Stocks and bonds unsettled by August data

The analysis in this article is provided 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 investments. 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.

2015-09-04 06:56:28

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

S&P500 (ES) Consolidation Ending Post-NFP

The S&P500 (ES) edged lower yesterday and continues its slide lower in today's Asian morning session.  The ES is now nearing the end of a consolidation triangle (on the daily chart), and has a weekly red candle that is increasingly engulfing last week's Hammer candle.  The weekly and 4hr RSI, Stochastics and MACD are all sliding lower, despite the daily RSI, Stochastics and MACD appearing bottomish.  With today's Non-Farm Payrolls (NFP) just around the corner, I will remain flat today going into the data release, but maintain a bearish bias and will look for short opportunities after 830am EST.

For more information about Tradable Patterns, click here.

 

S&P500 (CME ES Sep15) Weekly/Daily/4hr/Hourly

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity 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.

2015-09-04 06:54:51

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

Nikkei (NK) Nearing End of Triangle on Daily Chart Ahead of NFP

The Nikkei (NK) exhibited another daily Doji yesterday but has resumed its slide lower in today's Asian morning session.  The NK is now nearing the end of a consolidation triangle (on the daily chart), and has a weekly red candle that nearly engulfs completely last week's Hammer candle.  The weekly RSI and Stochastics are sliding lower, along with the daily and 4hr RSI, Stochastics and MACD.  With today's Non-Farm Payrolls (NFP) just around the corner, I will remain flat today going into the data release, but maintain a bearish bias and will look for short opportunities after 830am EST.

For more information about Tradable Patterns, click here.

 

Nikkei (SGX NK Sep15) Weekly/Daily/4hr/Hourly

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity 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.

2015-09-04 06:53:36

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor
Technical Analysis

VIX (VX) Consolidating Ahead of NFP @ 38.2% Retrace of ~15-30 Rally

The VIX (VX) consolidated further yesterday, forming a daily Doji and bouncing mid New York morning off the approximately 38.2% retrace of the ~15-30 rally over the last few weeks.  Weekly MACD continues sloping steeply up, despite the weekly RSI and Stochastics consolidating.  With the 4hr RSI and Stochastics in rally mode, and 4hr MACD about to positively crossover, the daily RSI and Stochastics are trying to turn up as well.  I am flat and will remain so going into today's Non-Farm Payrolls (NFP).  My intraday bias is towards the long side but I'll await the market action post-NFP before deciding on how to proceed.

For more information about Tradable Patterns, click here.

 

VIX (CFE VX Sep15) Weekly/Daily/4hr/Hourly

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity 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.

2015-09-03 16:04:25

Posted by
IB Securities Lending Desk
Contributor
Securities Lending

What is it with GoPro?

Lending rates on GoPro (Ticker: GPRO) have ticked up, coinciding with sustained pressure and heavy volume in its stock during the last few days at a time when global equity prices have rebounded. Shares pierced midweek lows today, dipping to close at $38.64, with the March 52-week low of $37.13 easily in sight. Momentum in the stock is also waning, with the 50-day moving average having turned south and heading slowly for the 200-day average. Industry comments from Ambarella also appear to be weighing on the stock, perhaps adding some conviction to those earlier-in-the-week heavy pockets of volume, which are likely to maintain pressure on borrowing costs as those trades settle over the rest of the week. With significant uptick in borrowing demand amongst Prime Brokers today, borrow rates are moving away from GC (0%) levels and trending toward -1% with outliers near -5%.

Chart – Can’t catch a bounce

The analysis in this article is provided 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 investments. 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.

2015-09-03 14:55:07

Posted by
Russ Koesterich, CFA
BlackRock
Contributor
Macro

Remember This Isn't 2008

After a seesaw week for stocks, Russ Koesterich explains why it's important to maintain perspective.

 

Investors may be feeling unnerved from the recent roller coaster ride in the markets.

Though stocks managed to close last week with modest gains after improving economic data and soothing comments from central bankers, U.S. equities experienced their most volatile week in years on continued concerns over China, global growth and deflation. The VIX Index, which measures U.S. equity market volatility, spiked to more than 50, the highest reading since the 2008 financial crisis.

However, as I write in my latest weekly commentary, “Keeping Firm Perspective as Markets Gyrate,” it’s important to maintain perspective. Recent U.S. economic data—including a solid July durable goods report and a sharp upward revision to second quarter gross domestic product (GDP)—paint a comforting picture, confirming a longer-term trend: The U.S. economy is still in relatively decent shape.

A quick refresher: While stocks peaked in the fall of 2007, markets didn’t really start their meltdown until the following spring. By then, according to Bloomberg data, there were already several indicators flashing red, not only for the market but for the broader economy. For example, by May of 2008, leading economic indicators had been consistently falling for nearly two years, new orders data had been contracting for six months and unemployment had been rising for 18 months.

In contrast, the U.S. economy is now holding up relatively well, despite the challenges in China and some other emerging markets. True, nobody would confuse the current economy with the glory years of the late 1990s. But leading indicators are up more than 4 percent year-over-year, new orders are comfortably in expansion territory and job creation remains robust, as Bloomberg data show.

Although it’s still entirely possible to have a bear market despite a decent economy, I don’t believe the current correction marks the end of the bull market, especially considering solid growth and a lower likelihood for a September Federal Reserve (Fed) hike in interest rates.

Indeed, to the extent the U.S. avoids slipping into a China-induced recession, market fundamentals remain sound. In fact, indiscriminate selling has opened up pockets of value, including in European equities, high yield bonds and mega-cap stocks.

 
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog.

 

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

©2015 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners.

iS-16506

This article is from BlackRock and is being posted with BlackRock’s permission. The views expressed in this article are solely those of the author and/or BlackRock 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.
 

2015-09-03 13:40:25

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor
Options

China Stock Rebound Seen in Options Play

Six weeks ago options trading at the $42.00 strike price in the iShares China Large Cap fund (Ticker: FXI) would have been considered at-the-money. That was before the ensuing meltdown drove shares in the China fund down to $32.80. Recent signs of stability in global equity markets have since boosted the price of the FXI ETF to $35.23. In options land on Thursday, one investor paid 13-cents for buying rights over 2.5mm shares back at the 42.0 strike, which would currently require a rebound of 18.9% to come good in time for when the options expire in October. The relatively low premium is up by 30% on a dime-closing price the prior day where a total of 50,000 contracts have traded. The number of open positions ahead of Thursday’s trading was less than 20,000 contracts.

Chart – FXI on the rebound?

The analysis in this article is provided 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 investments. 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.

2015-09-03 13:13:57

Posted by
Neil Azous
Founder & Managing Member
Rareview Macro LLC
Contributor
Macro

"QECB"

The European Central Bank press conference led by President Mario Draghi has passed.

As we highlighted in yesterday’s post (Professionals Holding Out Hope that ECB Tomorrow is Catalyst for Stability...Today is a Pause Day) there was very little discounted for the “surprise factor”. Not only are investors receiving the verbal communication that they are accustomed to but the ECB eased policy.

Some want to view the easing as only incremental in scope and not significant. In our opinion, the fact is that the actions were tangible and that is what matters most given the ECB’s history of using words instead of actions prior to the announcement of QE.

At the same, President Draghi “explicitly” said that the ECB is having no trouble buying bonds as part of the program. The fact that the ECB increased the amount of each bond issue it can purchase to 33% from 25% therefore suggests changing the limit was NOT related to something technical, but due to the forward looking view that inflation expectations will drop further. Put another way, this is a pre-cursor to either extending the time frame or increasing the size of QE.

Ironically, despite President Draghi being born on this day in 1947, he gave you a birthday present instead.

 

Sight Beyond Sight® is a global macro trading newsletter written daily by Neil Azous. With close to two decades of institutional experience across asset classes, Neil interprets the day-to-day economic, policy and strategy developments and provides actionable trading ideas for investors. We invite clients of Interactive Brokers to sign up for a free trial in Account Management. If you are not a client of IB, you can sign up for a free trial by visiting our website.


This article is from Rareview Macro and is being posted with Rareview Macro’s permission. The views expressed in this article are solely those of the author and/or Rareview Macro 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.

2015-09-03 12:24:46

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor
Options

Cobalt Energy January 2017 puts in play

Shares in Cobalt Energy (Ticker: CIE) are up sharply at $8.24 (+6.6%) and appear to have attracted the attention of at least one option trader with a bullish eye. Far-dated January 2017 put options appear to have been sold around 15,800 times in Thursday’s action for a premium of around 75-cents. While most of these typically bearish put contracts were traded at a mid-market price, at least some were sold. The strategy looks for the share price to remain well above the 5.0 strike price involved in the transaction – evidence bolstered by the strong rally in the share price. One year ago, shares in the exploration and production company traded at around $15.00 and have naturally been dragged earthwards by the bearish commodity complex and more recent dramatic slide in crude oil prices. This year’s low point reached $6.99 just last month, but you need to look all the way back to October 2011 to see the major low of $6.30. Is the put option seller safe just because the market is rebounding strongly? Well, that remains to be seen, but for now the prospect of having stock put to you at a significant discount thanks to worries over the global economy is apparently worth the 75-cent premium.  In the space of the past week, implied volatility in the January 2017 expiry has come down from 63-58%. The existing number of positions opened by investors at the 5.0 strike price before Thursday’s activity stood at 20,000 contracts.

Chart – Implied volatility in Cobalt’s January expiration waning as the share price catches a bid

The analysis in this article is provided 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 investments. 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.
 

1 2 3 4 5 2 699


Sign up to receive daily email summaries of Traders' Insight articles.

Click here

Disclosures

We appreciate your feedback. If you have any questions or comments about IB Traders' Insight please contact ibti@ibkr.com.

The material (including articles and commentary) provided on IB Traders' Insight is offered for informational purposes only. The posted material is NOT a recommendation by Interactive Brokers (IB) that you or your clients should contract for the services of or invest with any of the independent advisors or hedge funds or others who may post on IB Traders' Insight or invest with any advisors or hedge funds. The advisors, hedge funds and other analysts who may post on IB Traders' Insight are independent of IB and IB does not make any representations or warranties concerning the past or future performance of these advisors, hedge funds and others or the accuracy of the information they provide. Interactive Brokers does not conduct a "suitability review" to make sure the trading of any advisor or hedge fund or other party is suitable for you.

Securities or other financial instruments mentioned in the material posted are not suitable for all investors. The material posted does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before making any investment or trade, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. Past performance is no guarantee of future results.

Any information posted by employees of IB or an affiliated company is based upon information that is believed to be reliable. However, neither IB nor its affiliates warrant its completeness, accuracy or adequacy. IB does not make any representations or warranties concerning the past or future performance of any financial instrument. By posting material on IB Traders' Insight, IB is not representing that any particular financial instrument or trading strategy is appropriate for you.