Nasdaq Sinks to Start 2024 Trading
Nasdaq Sinks to Start 2024 Trading
Also 10-year T-note, gold, crude oil and Japanese yen futures
- Nasdaq-100 E-mini futures (/NQ): -0.95%
- 10-year T-note futures (/ZN): -0.57%
- Gold futures (/GC): +0.24%
- Crude oil futures (/CL): -0.20%
- Japanese Yen Futures (/6J): -0.50%
U.S. stock indexes sank this morning at the opening bell in the first day of trading for 2024. Treasury yields rose across the curve, with the 10-year yield rising about nine basis points to near the 4% mark. Crude oil prices rose on geopolitical concerns, and the Japanese yen weakened after a major earthquake in Japan.
Symbol: Equities | Daily Change |
/ESH4 | -0.73% |
/NQH4 | -0.95% |
/RTYH4 | -0.59% |
/YMH4 | -0.56% |
The tech-heavy Nasdaq-100 (NQH4) is leading equity markets lower this morning. Apple (AAPL) and ASML Holding (ASML) sunk in pre-market trading after the Netherlands moved to ban exports for some of the company's parts to China.
Strategy: (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 16,600 p Short 16,700 p Short 17,100 c Long 17,200 c | 20% | +1,545 | -470 |
Long Strangle | Long 16,600 p Long 17,200 c | 45% | x | -10,335 |
Short Put Vertical | Long 16,600 p Short 16,700 p | 60% | +715 | -1,285 |
Symbol: Bonds | Daily Change |
/ZTH4 | -0.16% |
/ZFH4 | -0.40% |
/ZNH4 | -0.55% |
/ZBH4 | -0.95% |
/UBH4 | -1.12% |
Treasuries are under pressure today as yields rise across the curve amid bond selling that started overnight in Europe. Investors are taking stock in Federal Reserve bets to start the year with a questioning attitude over the bank’s path prevailing across markets. A wealth of labor market data due later this week should do much to inform markets about the path of interest rate cuts.
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 111 p Short 111.5 p Short 113.5 c Long 114 c | 30% | +343.75 | -156.25 |
Long Strangle | Long 111 p Long 114 c | 42% | x | -1,375 |
Short Put Vertical | Long 111 p Short 111.5 p | 70% | +187.50 | -312.50 |
Symbol: Metals | Daily Change |
/GCG4 | +0.24% |
/SIH4 | +0.45% |
/HGH4 | -0.45% |
Gold prices (/GCG4) are slightly higher despite higher Treasury yields and a stronger dollar. The pullback in equity markets is likely driving some capital into precious metals in a defensive move to start the year. Tomorrow’s purchasing managers’ index (PMI) for U.S. manufacturing may change the tune on gold buying if the data impresses to the upside and causes markets to cut Federal Reserve rate cut bets. Then, later this week, the U.S. jobs report is due, which should influence gold prices along with the broader markets.
Strategy (55DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2,055 p Short 2,060 p Short 2,090 c Long 2,095 c | 12% | +420 | -80 |
Long Strangle | Long 2,055 p Long 2,095 c | 49% | x | -6,930 |
Short Put Vertical | Long 2,060 p Short 2,065 p | 66% | +200 | -300 |
Symbol: Energy | Daily Change |
/CLG4 | -0.20% |
/HOG4 | +1.15% |
/NGG4 | +3.10% |
/RBG4 | +1.14% |
Oil prices (/CLG4) gave up gains this morning as tensions in the Red Sea escalated after Iran sent a warship into the region following last week’s incident that saw the U.S. navy sink several Houthi boats. The Alvand-class ship is outdated compared to U.S. destroyers. One was sunk, among other ships, by the U.S. Navy back in 1988. Still, the deployment represents an escalation by Iran and may persuade shippers not to use the Suez Canal.
Strategy (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 70 p Short 70.5 p Short 75 c Long 75.5 c | 23% | +390 | -120 |
Long Strangle | Long 70 p Long 75.5 c | 42% | x | -4,550 |
Short Put Vertical | Long 70 p Short 70.5 p | 57% | +200 | -290 |
Symbol: FX | Daily Change |
/6AH4 | -0.51% |
/6BH4 | -0.83% |
/6CH4 | -0.60% |
/6EH4 | -0.74% |
/6JH4 | -0.56% |
The yen (/6JH4) is down against a broadly stronger U.S. dollar after an earthquake rocked Japan over the weekend, with the death toll nearing 50. In the hectic aftermath, a Coast Guard plane crashed today, killing all five crew members. The yen will likely take its cues from the dollar this week, which is set for an event-filled week.
Strategy (43DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.00705 p Short 0.0071 p Short 0.0073 c Long 0.00735 c | 34% | +400 | -225 |
Long Strangle | Long 0.00705 p Long 0.00735 c | 50% | x | -675 |
Short Put Vertical | Long 0.00705 p Short 0.0071 p | 60% | +275 | -350 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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