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Futures

FX Rundown


Euro (June)

Session close: Settled at 1.2224, down 61 ticks

Fundamentals: Tomorrow’s ECB meeting is the headline event of the week. They are expected to leave policy unchanged and the statement is due at 6:45 am CT. ECB President Mario Draghi begins his press conference at 7:30 am CT and his comments will be the most crucial. The Euro capped off an abysmal stretch ahead of this meeting by closing below our major three-star support and at the lowest level since January 12th. Ironically, we mention this January 12th area because the day prior, the Minutes from the December ECB Meeting pointed to a change in message around the corner. Many, including us, believed this was the first step towards hiking by the end of 2018. At their March meeting, the ECB removed their pledge to increase stimulus if necessary. While the Euro has lost significant ground over the last week, we look to the market now pricing in a dovish rhetoric tomorrow. While recent business sentiment data and Manufacturing has been downright poor, inflation has had traction and we believe this has gotten lost in much of the noise; the liquidation of the massive net-long position in the Euro and short-covering in the Dollar. The U.S 10-year crossing the 3% threshold has strengthened the Dollar, a surprisingly hawkish or simply not dovish ECB could get the Bund and regional yields cooking. As we have said early in the week, the door is now open for a strong recovery in the Euro tomorrow. German Consumer Climate is due at 1:00 am CT. From the U.S weekly Jobless Claims, Durable Goods and Trada Balance data are all due at 7:30 am CT.

Technicals: Price action is undeniably weak after closing below major three-star support at 1.2254-1.22765. However, this does not change our long-term outlook for the Euro as we remain unequivocally long-term bullish. In fact, we believe that this move is a ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

Yen (June)

Session close: Settled at .9176, down 57.5 ticks

Fundamentals: The U.S Dollar continues to strengthen as the U.S 10-year has cleared the 3% barrier. This presents the biggest blow to the Yen because of the carry trade. Additionally, equity markets bounced back strongly today and have seen further strength after-hours on great tech earnings. While the Yen is trading at tremendous support, traders must be cautious on both sides of the trade for the aforementioned reasons and as we gear up for Dollar-related volatility due to the ECB meeting and tomorrow night’s Bank of Japan meeting.

Technicals: The Yen held major three-star support though today’s session and close, but it is hanging by a thread; this level aligns multiple key technical indicators along with ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

Aussie (June)

Session close: Settled at .7565, down 34 ticks

Fundamentals: The Aussie got smoked today and it has been the only currency in which we have a Bearish Bias. Yesterday, we pointed to weak CPI data and this coupled with a soft metals complex has paved the way for a path of least resistance lower. Import/Export Price Index data is due tonight at 8:30 pm CT. Traders must watch the U.S Dollar’s reaction to tomorrow’s ECB meeting, do not be mistaken, this will affect the Aussie.

Technicals: As mentioned above, the path of least resistance is lower, and we are targeting ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

Canadian (June)

Session close: Settled at .7792, down 8.5 ticks

Fundamentals: The Canadian held ground the best against the strengthening or we should say short-covering in the U.S Dollar. The energy complex posted a good session and Crude Oil recovered to settle back above the $68 mark. Bank of Canada Governor spoke this afternoon and noted that they will remain cautious while inflation is gaining traction. There is now data out of Canada tomorrow, but the currency will be susceptible to Euro related swings in the U.S Dollar. However, traders do need to keep in mind that the steel and aluminum tariffs are set to go into effect next week and this will put pressure on sides to achieve a NAFTA deal; a failure to do so would hurt the Canadian.

Technicals: We remain Neutral due to the U.S Dollar strength, the undeniable weakness and NAFA headwinds. Still, major three-star support at ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Visit our website at www.bluelinefutures.com to open an account and stay up to date with our research.

Bill Baruch is President and founder of Blue Line Futures. Bill has more than a decade of trading experience. Working with clients he focuses on developing trading strategies that present a clear objective for both long and short-term trading approaches. He believes that in order to properly execute a trading strategy, there must be a well-balanced approach to risk and reward.

Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER which followed running a trade desk at Lind Waldock and MF Global.

Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications. 

Blue Line Futures is a leading futures and commodities brokerage firm located at the Chicago Board of Trade. We work with clients that range from institutional to professional to novice and from self-directed to broker-assisted. No matter what type of trader you are, our mission is simple; to put the client first. This means bringing YOU strong customer service, consistent and reliable research and state of the art technology. 

This article is from Blue Line Futures and is being posted with iBlue Line Futures’ permission. The views expressed in this article are solely those of the author and/or Blue Line Futures 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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Options

Cboe - What's Trading: TWTR


Peter Lusk discusses a size put trade in TWTR & implied volatility post earnings.

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 © 2018 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 video are solely those of the author and/or Cboe and IB is not endorsing or recommending any investment or trading discussed in the video. 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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Stocks

Interactive Brokers - Verizon's Earnings Beat Helps Buoy Stock and Credit Profile


The stock performance of US telecom companies has been generally hampered by intense competition, slow growth and rising interest rates. 

The yield on the 10-year US Treasury note broke above 3% for the first time in more than four years on an intraday basis Tuesday, and with investors monitoring the risk of higher interest rates, worries have been mounting about future equity performance. These concerns include the financial health of the telecom sector as debt service costs rise.

Analysts have pointed out telecom operators’ overall net profit margins have been declining as competition intensifies, while capex has been climbing as telcos seek to improve and expand their networks.

However, Verizon’s (VZ) first quarter of 2018 earnings report released Tuesday helped buoy its stock, even as the S&P 500 (SPX) continued to fall, having shaved off another 1.35% on the day.

The giant telco’s adjusted earnings came in at US$1.17 per share, beating analysts’ calls for around US$1.10 EPS, with operating revenues of US$31.8bn, roughly US$500m more than expected. The firm’s revenues also grew around 3.2% year-on-year, driven by its wireless business, equipment, and improved service revenue results.

VZ shares were up about 2.14% intraday Tuesday, outperforming the iShares U.S. Telecommunications ETF (IYZ) by a healthy margin, and were rising by more than 0.3% in Wednesday’s trading session.

Meanwhile, the threat from streaming video service firms such as Netflix (NFLX) and Amazon Prime (AMZN) continue to bite into the telco’s subscriber base, as roughly 22k FiOS video customers jumped ship. Dave Novosel, senior analyst at corporate bond research service firm Gimme Credit, noted cord cutting continues to pressure traditional linear subs, and “Verizon still has no formal plans to introduce an over-the-top offering.” 

In terms of credit, analysts also generally remain concerned about worsening profiles amongst US corporations, at least since the Fed enacted its series of monetary policies and quantitative easing measures designed to help stimulate the economy in the wake of the 2008 credit crisis.

In the past four years alone, the US corporate bond market has risen from around US$4trn to more than US$5.5trn, and overall credit quality at certain firms has been steadily eroding – especially as the number of ‘BBB’-rated companies – the lowest rung on the investment-grade rating ladder – has been expanding. This cohort includes the top two US carriers AT&T (T) and VZ.

Novosel expects VZ’s free cash flow to be boosted by the new tax law, with leverage remaining at around 2.6x through 2018. He said that while he doesn’t expect any debt reduction, especially given VZ’s US$1bn pension plan contribution, the positive free cash flow should “obviate the need for a significant amount of new debt.”

Despite any fears of debt-driven balance sheet erosion, the spreads on both T’s and VZ’s 5-year CDS have barely flinched. Over the past three months, T’s CDS widened by less than 8bps to 75bps, while VZ tightened by 1bp to around 62bps. Year-to-date returns for telecom-related bonds are also up by nearly 3.25% to 423.40, according to the S&P 500 Telecommunication Services Corporate Bond Index, a sub-index of the S&P 500 Bond Index.

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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.


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Stocks

Nasdaq Market Intelligence Desk - Equity Market Insight April 25, 2018


NASDAQ Composite -0.20% Dow -0.22% S&P 500 -0.19% Russell 2000 -0.14%

NASDAQ Advancers: 811 Decliners: 1276

Today’s Volume (100 day avg) +16.4%

 

Yesterday’s optimistic start faded away as investors feared that earnings are at a peak.  Asian and European markets followed the US lower overnight, and the weakness continues this morning with the major indices and most sectors in the red though we are well off the initial lows.  Energy (-0.6%) leads to the downside and Tech (-0.4%) isn’t far behind while Staples (+0.2%) is the only positive sectors.  Market volumes were above average yesterday for the first time in two weeks and is off to a strong start today.  Lastly gold is off 0.8% while the dollar index continues higher with a 0.4% advance.

  • It’s been quite a first quarter earnings season so far. We have seen earnings growth of more than 18% and an 80% beat rate yet the markets are little changed since the beginning of the season. Companies that have topped estimates have seen just a 0.1% gain in the 2 days after reporting well below the average of 1.1% according to Factset. What gives, you ask beyond the obvious concerns of a trade war with China, the 10 year Treasury yield touching 3% and potentially a more aggressive Fed??? Well earnings reports are backwards looking meaning that further appreciation from tax cuts will begin to fade over time. It’s probably already priced into the market and investors are beginning to realize that a potential deceleration is ahead. Case in point Caterpillar’s statement that this quarter was probably a “high water mark” for the stock.
  • Yield on the ten year hitting the psychologically important 3% mark yesterday but interestingly rate-sensitive sectors Utilities and REITs both closed with gains, and BDCs closed flat.  That suggest yesterday’s selling was not so much a reaction to higher rates, instead “the more obvious culprit is the very high starting equity valuations, the Fed tightening and strong earnings being discounted” says Evercore analyst Dennis DeBusschere.
  • Crude oil inventories rose last week by nearly 2.2 million barrels; gasoline has a small build while distillate stocks fell more than expected.  The inventory build is the ninth in the past twelve weeks.  Crude prices were flat ahead of the data release and have since weakened slightly with WTI off -0.4%. 

 

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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Technical Analysis

Nasdaq -Technical Take


Equity markets are heavy again with ALL of the major indices and sectors starting today’s session in the red.   Despite rates making new highs, the bond proxy staples and utility sectors have now turned positive.  Staples are bouncing along the clearly defined support line we highlighted in yesterday’s BLOG.   The S&P 500 index came within 3 points of its 200-day simple moving average (sma), now 2,609, which previously acted as a reliable support line back in February and March/April.   This time however the 200-day sma (yellow line) looks much more vulnerable as the more a support line is tested the more likely it is to give way.   A breakdown below it opens up a move to the 2018 closing low 2,580.  The year’s intraday lows are not far below there at 2,554 and 2,533 (blue lines), with all three levels qualifying as “horizontal” support of the descending triangle pattern (a, b, c, d, e) forming since the January 26 high.  However another possibility is a “zigzag’ ABC correction.  We highlighted this possibility in the early April BLOG  and noted the zigzag projects a measured move to 2,460, - 2,470 range which assumes the initial downtrend, wave A, equals C. 

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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