S&P 500 and Nasdaq 100 Bounce on Heels of TSM Earnings
S&P 500 and Nasdaq 100 Bounce on Heels of TSM Earnings
Also 10-year T-note, silver, crude oil and Euro futures
- S&P 500 E-mini futures (/ES): +0.40%
- 10-year T-note futures (/ZN): -0.23%
- Silver futures (/SI): -0.41%
- Crude oil futures (/CL): +1.12%
- Euro futures (/6E): -0.18%
Geopolitical tensions continue to increase after Pakistan and Iran exchanged fire over the past two days, while the U.S.- and U.K.-led coalition continues to target Yemeni Houthis in order to unclog the Red Sea. Nevertheless, markets don’t seem to care: There’s no safe-haven bid in U.S. Treasury bonds, and there’s no panic trading in energy markets.
Symbol: Equities | Daily Change |
/ESH4 | +0.40% |
/NQH4 | +0.85% |
/RTYH4 | +0.51% |
/YMH4 | -0.12% |
U.S. equity markets are staging a modest bounce following two days of losses, with three of the four major indexes pointing higher at the start of the U.S. cash equity session in New York. The Nasdaq 100 (/NQH4) is the leader to the upside, while the S&P 500 (/ESH4) is posting a modest gain, just under 0.5% higher. Tech stocks are taking a leg higher on the back of Taiwan Semiconductor’s (TSM) earnings that highlight the ever-increasing demand for chips in a global economy adopting AI.
Strategy: (43DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 4740 p Short 4750 p Short 4830 c Long 4840 c | 16% | +387.50 | -112.50 |
Long Strangle | Long 4740 p Long 4840 c | 51% | x | -5500 |
Short Put Vertical | Long 4740 p Short 4750 p | 61% | +170 | -330 |
Symbol: Bonds | Daily Change |
/ZTH4 | -0.01% |
/ZFH4 | -0.04% |
/ZNH4 | -0.08% |
/ZBH4 | -0.23% |
/UBH4 | -0.30% |
U.S. labor market data isn’t helping to cool the selling in the Treasury market. 10-year T-note futures (/ZNH4) are moving lower for a third day, pushing the underlying yield farther above the 4% mark that was breached on Tuesday. Later today, the results of a 10-year TIPS auction are due; yesterday’s weak 20-year bond auction hobbled markets.
Strategy (36DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 109 p Short 109.5 p Short 113.5 c Long 114 c | 61% | +156.25 | -343.75 |
Long Strangle | Long 109 p Long 114 c | 26% | x | -375 |
Short Put Vertical | Long 109 p Short 109.5 p | 84% | +93.75 | -406.25 |
Symbol: Metals | Daily Change |
/GCG4 | +0.29% |
/SIH4 | -0.41% |
/HGH4 | -0.29% |
Silver futures (/SIH4) continue to fall and the metal is approaching a key point of technical support near lows not traded since November. The bond market’s repricing of rate-cut bets has pressured precious metals over the past few weeks, and so far, there doesn’t appear to be willing buyers to step in at these prices. With little data on where U.S. inflation stands due until later this month, the bearish narrative may persist.
Strategy (39DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 22.1 p Short 22.25 p Short 23.1 c Long 23.25 c | 23% | +555 | -195 |
Long Strangle | Long 22.1 p Long 23.25 c | 44% | x | -4070 |
Short Put Vertical | Long 22.1 p Short 22.25 p | 60% | +315 | -435 |
Symbol: Energy | Daily Change |
/CLG4 | +1.12% |
/HOG4 | +0.74% |
/NGG4 | -1.81% |
/RBG4 | +0.13% |
Crude oil prices (/CLH4) are inching higher this morning after the Paris-based International Energy Agency (IEA) raised its oil demand growth outlook for 2024 by 180,000 barrels per day to 1.24 million barrels per day (bpd). The IEA cited an improved economic outlook ahead of expected rate cuts. However, markets aren’t so sure about rate cuts anymore, likely explaining oil’s subdued reaction to the upgraded forecast. The U.S. Energy Information Administration (EIA) will report inventory data later today.
Strategy (27DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 70 p Short 70.5 p Short 75.5 c Long 76 c | 29% | +330 | -170 |
Long Strangle | Long 70 p Long 76 c | 42% | x | -2980 |
Short Put Vertical | Long 70 p Short 70.5 p | 64% | +170 | -330 |
Symbol: FX | Daily Change |
/6AH4 | +0.14% |
/6BH4 | -0.16% |
/6CH4 | +0.08% |
/6EH4 | -0.18% |
/6JH4 | +0.07% |
Euro futures (/6EH4) moved lower this morning amid growing expectations for a rate cut by the European Central Bank (ECB) as soon as June. While ECB President Christine Lagarde pushed back recently on the prospect of cuts by the market, saying it won’t help the ECB, rate traders foresee a cut as soon as June. Lagarde is expected to speak several times over the coming days in Davos. The ECB president said the bank wants to see data on collective wage agreements to get a better idea of where inflation is heading, with the data expected to come out in late spring.
Strategy (50DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.07 p Short 1.075 p Short 1.105 c Long 1.11 c | 46% | +300 | -325 |
Long Strangle | Long 1.07 p Long 1.11 c | 34% | x | -862.50 |
Short Put Vertical | Long 1.07 p Short 1.075 p | 80% | +150 | -475 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.