futs rpt 7-6-19
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Morning ReportBy Indexconnect
Copyright © 2010 Drakon Capital, LLC. All rights reserved.
July 6, 2010
1
NO HOILDAY FOR THE MARKETSIt’s a general rule that the markets tend to rally around the end and the beginning a new quarter. Sometimes they rally into long holiday weekends too. Well, this time we got both and the markets didn’t rally on either occasion.
On the 8:30 open Friday morning the SPU opened at the 1026.00 to 1026.50 level. After that the SPU made its daily high at 1028.70 then slowly but surely made several new lows all the low down to 1011.00, traded side ways until catching bid going into the 3:00 cash close only to fall back and settle at 1014.30, down 7.50 handles on the 3:15 futures close. The end the markets are doing what they do best now. They rally a bit then sell off. The price action is in stone and if you have been playing it that way our hat is off to you. Last week the cash S&P closed down about 5%. As of Fridays close the SPU is 16% off its APR 23rd high. The DOW finished out the week down 4.5% or off 457 points, its worst weekly performance since the MAY 6th FLASH CRASH. The NASDAQ finished the week down the worst, down 5.9%. In the end, yes we could blame it on the job numbers but in all honesty it was one bad number after another all week long. And you know what? It actually felt like all the numbers were going to come in bad. In terms of the markets over all tone the markets just could not “hold the rally” In terms of the overall trade it was some what busy all week.
Below is the S&P futures closes. It’s not pretty. What else is not pretty is what Bob Prechter is saying. He is convinced we have “entered a market decline of staggering proportions” – perhaps the biggest of the last 300 years. We don’t know about that but what we do know is the markets have hat fared well over the last couple of weeks. Starting back on APR 26th and APR 27th the SPU started to sell off. Over the last 47 trading days 30 have closed lower. In the short run the SPU has been down 9 out of the last 11 days or it has close lower 5 days in a row or right and has lost around 100 handles in the last 9 down days. You do the math things are shrinking fast.
Morning ReportBy Indexconnect
Copyright © 2010 Drakon Capital, LLC. All rights reserved.
July 6, 2010
2
It’s Monday night and so far the Nikkei dropped to a 6 month low and European shares fell to a 6 week low and at 7:20 pm the SPU is down 6.75 at 1007.50. Its now Tuesday morning and the SPU is up 11 handles at the 1125.50 level, crude is up .68 cents and the EURO is up 38. The main head line out this is “Bargain Hunters Lift World Markets” that the markets are up as investors anticipate Wall Street gains. In Asia 11 out of 11 markets closed higher. In Europe 10 out of 10 markets are trading higher. After 5 down days in a row the markets are going to gap sharply higher. The markets are long over due for a push up but buying them up 10 or 11 handles based on the current price action is a hard way to go. Our call? We think we are seeing the beginning of a big up day. But we can not rule out a sell off or two.
Morning ReportBy Indexconnect
Copyright © 2010 Drakon Capital, LLC. All rights reserved.
July 6, 2010
3
TODAY’S PIVOTS FROM CHICAGOSTOCK
ESU0 September Emini SP500Intraday
Pivot----------1018.00 Range---1016.13-1019.883day
Pivot----------1021.58 Range---1017.92-1025.25
CLQ0 August Crude OilIntraday
Pivot----------72.34 Range---72.24-72.453day
Pivot----------73.53 Range---72.84-74.23
GCQ0 August GoldIntraday
Pivot----------1206.8 Range---1206.6-1207.03day
Pivot----------1217.3 Range---1212.3-1222.4
Morning ReportBy Indexconnect
Copyright © 2010 Drakon Capital, LLC. All rights reserved.
July 6, 2010
4
About Drakon CapitalDrakon Capital delivers market-driven, real-time trading intelligence to institutional clients in the equity and equity derivatives markets.
Headed by Guy Adami, formerly with Drexel Burnham, Goldman Sachs, and CIBC, Drakon Capital develops client-focused research in portfolio strategy, derivatives, and equities, based on its own proprietary analytical system. Our clients use these market-driven insights and trading ideas to refine their own strategies.
About IndexconnectIndexconnect is a group of veteran of traders and market technicians who have been providing their IM service to their trading customers for more than 15 years. Centralized in the index markets with their desk 10 feet from the S&P 500 futures pit, Indexconnect can provide unique perspective and live quotes from every pit at the CME. They currently provide their services to many of the world's larger hedge funds and prop trading desks.
DisclaimersThis report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional financial, tax and legal advisors. Nothing in this report is intended to be a recommendation to buy or sell any futures or options contract. Information furnished by others, upon which all of the portions of this report are based, is believed to be reliable at the time of publication but has not been verified and no warranty is given as to the accuracy of such information. Drakon Capital, LLC and its affiliates accept[s] no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damage even if advised of the possibility of such damages. Drakon Capital, LLC does not guarantee the accuracy or completeness of the information contained in this report or any analysis based thereon.