DeMark Says S&P 500 May Peak Above 1,250 This Week, Decline 5.6%

DeMark Says S&P 500 May Peak Above 1,250 This Week, Decline 5.6%
   
S&P 500 may advance as high as 1,254 before falling at least 5.6%, technical analyst Tom DeMark wrote in an e-mail today.

This rally should squeeze short sellers and exhaust late buying: DeMark; The rally should be fast.

DeMark's prediction last month that the S&P's decline would stop at 1,076 proved prescient, it bottomed at 1,074.77

S&P would produce sell signal today by closing above its Oct. 12 close of 1,207.25, marking 9th consecutive day the benchmark exceeded its final price four days earlier: DeMark

Close above 2-mo. high of 1,224.58 reached on Oct. 14 would "perfect" the sell setup:


-DeMark


http://seaofopportunity.blogspot.com/


*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! 


 No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Euro-zone Still Driving the Bus

Morning Note

August 16, 2011

US Equity futures are all trading lower despite a 3 day winning streak following a negative opening across Europe after Germany reported much weaker than expected GDP figures (+2.8% y/y vs consensus +3.2%). In addition to earnings, economic data, including July Housing starts followed by July Industrial Production before the opening bell.

Options Flow Recap Aug 15

Macro / Thematic

FXI iShares FTSE/Xinhua China 25 Index - 28,500 of the September 40 calls were bought to open for $0.50. A total of 40,609 traded on the day. Also a buyer of 23,000 Nov 42 calls for 65 

IWM iShares Russell 2000 Index – 32,000 of the November 57 / 63 / 69 put fly was bought for $0.62. The put fly was bought to open and has a maximum profit $5.38 if the IWM closes at $63.00 on November expiration, a decline of 12.2% from the current price ($71.76).


GLD SPDR Gold Trust : seller 11,500 Jan 135/150 call spread for 13.10


IYR iShares Dow Jones US Real Estate : seller 5,500 Aug 61 puts, seller 5,500 Sep 56 calls, collecting 7.20

Morning Note

August 9, 2011

US futures continue to be volatile, with Dow futures oscillating between a loss of (318) points and a gain of 324 points.

Today's main focus will be the release of the Fed statement from today's FOMC meeting, scheduled for 14:15 ET.

Treasury Auction of 3-yr notes at 13:00 ET

Greece sells €812.5M 6M T-Bills, average yield 4.85% vs prior auction 4.90%, bid to cover 3.06 vs prior 2.88

Morning Note

August 3, 2011


Global growth worries and European peripheral debt contagion continue to weigh on investor sentiment after stocks fell for sixth straight days on continued concerns that the US recovery is faltering. Both Moody's and Fitch affirmed 'AAA' credit rating for the US while a Chinese credit-rating agency cut U.S. Treasuries from A+ to A with a negative outlook.

EU Commission to make statement later today on market situation

Italy's Prime Minister is scheduled to address parliament on the economy at 14:00UK time (9ET)

Swiss National Bank takes measures against strong Swiss franc. The SNB considers the Swiss franc to be massively overvalued at present. Current strength of the Swiss franc is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc.

Morning Note

August 1, 2011

Equity futures are trading well above fair value following the last-minute bipartisan debt agreement, although the risks of debt downgrade are still a possibility. The debt deal still must be approved by the Senate and House. A Senate vote could occur as early as this morning.


WHAT TO WATCH: The House plans votes today and the Senate may follow suit to consider the agreement reached last night to raise the debt limit by at least $2.1 trillion and slash government spending by $2.4 trillion or more. An index of U.S. manufacturing probably slipped to 54.5 in July, economists said before the ISM report at 10 a.m. The People�s Bank of China signaled it�s too early to relax monetary policy. The Reserve Bank of Australia will likely keep the overnight cash rate target at 4.75 percent tomorrow, according to a Bloomberg survey.

Weekend Watch: Tax Loophole for Futures Traders

Andrew Ross Sorkin on the very advantageous tax rate of 23% futures traders pay on gains. Change could be on the table during debt ceiling negotiations in Washington.




http://seaofopportunity.blogspot.com/ *Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

Weekend Watch: The Stock Mentor

http://seaofopportunity.blogspot.com/ 

Morning Note

July 15, 2011

Equity futures are modestly above fair value as the news that S&P had put US government debt on credit watch negative, and more tightening measures on the property market coming out of China, hurt sentiment. Asia came off its lows during the trading day, and US futures have risen off earlier lows.

Morning Note

July 8, 2011

Equity futures reversed early gains and are now trading below fair value ahead of today's nonfarm payroll data due at 08:30 ET. President Barack Obama said yesterday Democrats and Republicans remain "far apart on a wide range of issues" in budget talks and said talks would resume on Sunday. A French court said on Friday it is delaying until 4-August its decision on whether to launch a legal inquiry into the role of IMF chief Christine Lagarde in a 2008 arbitration payout.

US derivatives watchdog gets more firepower

This is a big deal.  Recklessness is an interesting word they choose to use. 


This article appeared via FT here:  http://www.ft.com/cms/s/0/e35eccb6-a8b4-11e0-b877-00144feabdc0.html#ixzz1RS6D4mUw

"The main US derivatives regulator has approved rules boosting the agency’s legal firepower against market manipulation after winning only one case at trial in its 36-year history.

The rules, adopted over the objections of hedge funds and the futures industry, will allow the Commodity Futures Trading Commission lawyers to cite recklessness as a reason to sue traders for manipulation. Previous rules required proof that traders had distorted prices.

Morning Note

July 7, 2011

Equity futures are trading above fair value with today's interest rate decision from the BOE and the ECB and ahead of the ADP employment report. The BOE left benchmark interest rates unchanged at 0.5% and maintains Quantitative Easing Asset Purchase Programme at £200B. The ECB is expected to raise benchmark interest rate 25bps to 1.5%.

Taking questions over Twitter yesterday at a White House, President Obama didn’t rule out using the 14th amendment to the Constitution to order Congress to raise the debt ceiling. He added that Congress and the White House can strike a deal to cut the deficit and raise the debt ceiling “over the next week to two weeks.

Greece's Finance Minister Evangelos Venizelos will meet with ECB President Jean-Claude Trichet in Frankfurt today.

Morning Note

July 5, 2011

Equity futures are trading above fair value after the US July 4th holiday. Stocks were little changed in Asia as relief over a potential Greek crisis was overshadowed by a Moody's report saying Chinese bank debt was worse than feared as well as more interest rate hikes as whisper numbers of a high CPI print made their way through the market.

Morning Note

June 29, 2011

Equity futures are trading above fair value following gains in Europe on optimism the Greek parliament will today approve the austerity program. Indices and futures rose further after an opposition party MP said he will back the austerity package, causing a surge in the Euro. Passage of the austerity plan and an implementation law on Wednesday and Thursday are conditions for Greece to receive the next installment of the €110B bailout from the European Union and International Monetary Fund. Prime Minister George Papandreou has a five-seat majority, but some members of his party have threatened to vote against it. It's reported that the vote will probably take place between now and 15:00 BST (now and 10:00 ET)

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