Nasdaq 100 Led Lower by Apple, Tesla
Nasdaq 100 Led Lower by Apple, Tesla
Also 5-year T-note, gold, crude oil, and Japanese yen futures
- Nasdaq 100 e-mini futures (/NQ): -1.78%
- 5-year T-note futures (/ZF): +0.08%
- Gold futures (/GC): +0.43%
- Crude oil futures (/CL): -0.51%
- Japanese yen futures (/6J): +0.30%
Struggling mega-cap tech stocks, led by Advanced Micro Devices (AMD), Tesla (TSLA), and Apple (AAPL), are weighing on U.S. equity markets on Tuesday.
Traders continue to await Fed Chair Jerome Powell’s testimony later this week, while the February U.S. jobs report is due on Friday. Bonds may be taking their cues from precious metals, which are continuing their three-day surge. Elsewhere, lower yields are spilling over into foreign exchange markets, with the Japanese yen outperforming its peers.
Symbol: Equities | Daily Change |
/ESH4 | -0.44% |
/NQH4 | -1.78% |
/RTYH4 | -0.58% |
/YMH4 | -0.37% |
Investors pare back
U.S. equity markets are just days removed from all-time highs and a week littered with macro-event risk daily moving forward has traders paring back their bullish bets.
The Nasdaq 100 (/NQH4) is the leader lower amid continued weakness by former bellwethers AAPL and TSLA, both of which are trading at yearly lows. For now, technical uptrends remain in place. The pullbacks at the topline offer little evidence of topping yet.
Strategy: (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 17250 p Short 17500 p Short 19000 c Long 19250 c | 22% | +1960 | -3035 |
Short Strangle | Short 17500 p Short 19000 c | 27% | +6645 | x |
Short Put Vertical | Long 17250 p Short 17500 p | 60% | +785 | -4215 |
Symbol: Bonds | Daily Change |
/ZTM4 | +0.07% |
/ZFM4 | +0.20% |
/ZNM4 | +0.35% |
/ZBM4 | +0.86% |
/UBM4 | +1.10% |
Bonds move higher
Bonds have been disconnected from the broader shift in rate-sensitive assets in recent days but may finally be playing catchup on Tuesday.
Higher across the curve, the long end is leading the way higher with 30s (/ZBM4) testing their highest level since the release of the January U.S. consumer price index (CPI) report. There are no meaningful Treasury auctions today or the rest of the week.
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 105.25 p Short 105.5 p Short 109 c Long 109.25 c | 56% | +85.94 | -164.06 |
Short Strangle | Short 105.5 p Short 109 c | 65% | +460.94 | x |
Short Put Vertical | Long 105.25 p Short 105.5 p | 90% | +46.88 | -203.13 |
Symbol: Metals | Daily Change |
/GCJ4 | +0.43% |
/SIK4 | +1.00% |
/HGK4 | -0.08% |
Gold and silver rise
Both gold (/GCJ4) and silver prices (/SIK4) have continued their surge higher over the past few sessions, climbing to their highest levels of the year.
For the latter, all-time highs are quickly coming into reach; yesterday marked the highest close ever for /GCJ4. Measures of volatility continue to rise, and call skew may ultimately make for an interesting opportunity to the fade the rally once technical indications of topping appear.
Strategy (51DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2085 p Short 2100 p Short 2215 c Long 2225 c | 43% | +630 | -870 |
Short Strangle | Short 2100 p Short 2215 c | 60% | +3760 | x |
Short Put Vertical | Long 2085 p Short 2100 p | 76% | +400 | -1100 |
Symbol: Energy | Daily Change |
/CLJ4 | -0.51% |
/HOJ4 | +0.51% |
/NGJ4 | +0.78% |
/RBJ4 | -0.98% |
Crude oil moves lower
Crude oil futures (/CLJ4) drifted lower Tuesday as worries over Chinese growth accelerated amid a backdrop of broader concerns over global economic growth.
China set a 5% growth target for 2024, matching last year’s target. However, the target didn’t come with a vigorous plan to stimulate that growth.
Experts expect the American Petroleum Institute (API) to report a crude build of 2.6 million barrels for the week ending March 1.
Strategy (43DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 74 p Short 74.5 p Short 80.5 c Long 81 c | 32% | +320 | -180 |
Short Strangle | Short 74.5 p Short 80.5 c | 57% | +3380 | x |
Short Put Vertical | Long 74 p Short 74.5 p | 67% | +150 | -350 |
Symbol: FX | Daily Change |
/6AH4 | -0.21% |
/6BH4 | -0.02% |
/6CH4 | -0.03% |
/6EH4 | -0.07% |
/6JH4 | +0.30% |
Yen leads the way higher
The pullback in U.S. Treasury yields is filtering through into FX markets, where the Japanese yen (/6JH4) is leading the way higher on Tuesday.
Noteworthy, however, is that volatility is rising across FX, and the drop in yields is not proving to be a tailwind for other currencies; there is a distinct ‘risk off’ tone that hasn’t been seen in some time.
Strategy (31DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.00655 p Short 0.0066 p Short 0.0069 c Long 0.00695 c | 63% | +162.50 | -462.50 |
Short Strangle | Short 0.0066 p Short 0.0069 c | 69% | +425 | x |
Short Put Vertical | Long 0.00655 p Short 0.0066 p | 89% | +56.25 | -568.75 |
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
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