Nasdaq 100 Continues Tepid Rebound Ahead of Tech Earnings
Nasdaq 100 Continues Tepid Rebound Ahead of Tech Earnings
Also, 5-year T-note, silver, crude oil and British pound futures
Nasdaq 100 e-mini futures (/NQ): +0.40%
5-year T-note futures (/ZF): -0.10%
Silver futures (/SI): +0.59%
Crude oil futures (/CL): -1.03%
British pound futures (/6B): +0.22%
Equity futures are recovering Tuesday morning after a series of mixed earnings reports from Wall Street.
General Motors (GM) raised its full-year guidance after setting a first-quarter sales record, which injected a sense of optimism into economic expectations for the United States.
PepsiCo (PEP) also rose slightly after a revenue beat. Earnings will likely continue to dictate market sentiment this week, with plenty of heavy hitters left on the calendar.
The focus this season will hinge around tech, specifically the outlook on demand for the chip sector and the broader guidance on artificial intelligence. U.S. new home sales for March and April U.S. purchasing managers' index (PMI) updates from S&P Global are due this morning.
Symbol: Equities | Daily Change |
/ESM4 | +0.35% |
/NQM4 | +0.40% |
/RTYM4 | -0.21% |
/YMM4 | +0.27% |
Nasdaq moves higher
Nasdaq futures (/NQM4) led equity markets higher on Tuesday morning ahead of the opening bell as investors eye big tech earnings. Lockheed Martin Corp (LMT) rose in pre-market trading after posting an impressive beat in sales and earnings, helped by the ongoing conflicts in Eastern Europe and the Middle East.
Tesla Inc (TSLA) will report after the bell today to kick off the season for the Magnificent Seven. Those earnings will likely be paramount to how much risk traders want to take moving forward.
Strategy: (58DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 16000 p Short 16250 p Short 18750 c Long 19000 c | 62% | +1420 | -3580 |
Short Strangle | Short 16250 p Short 18750 c | 67% | +5395 | x |
Short Put Vertical | Long 16000 p Short 16250 p | 86% | +765 | -4235 |
Symbol: Bonds | Daily Change |
/ZTM4 | -0.05% |
/ZFM4 | -0.10% |
/ZNM4 | -0.16% |
/ZBM4 | -0.33% |
/UBM4 | -0.39% |
Treasury yields rise
Treasury yields rose this morning following an overnight move in Europe where strong economic data eased worries over the economic outlook. It’s a busy week for Treasury markets, with several potentially high-impact auctions on tap, starting with today’s two-year note auction. Two-year floating rate notes (FRNs) and five-year notes will have auctions tomorrow, followed by a seven-year note auction on Thursday.
Strategy (31DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 103.25 p Short 103.5 p Short 106.5 c Long 106.75 c | 64% | +70.31 | -179.69 |
Short Strangle | Short 103.5 p Short 106.5 c | 71% | +296.88 | x |
Short Put Vertical | Long 103.25 p Short 103.5 p | 89% | +39.06 | -210.94 |
Symbol: Metals | Daily Change |
/GCM4 | -0.94% |
/SIK4 | -0.59% |
/HGK4 | -1.71% |
Silver futures drops
Silver futures (/SIK4) extended yesterday’s selloff this morning, dropping about 0.72% as yields rose amid easing tensions across the Middle East. The odds that rate cuts come later rather than sooner is also hitting demand for the precious metals and that demand may come under more pressure if tech earnings impress and manage to pull away some capital and haven flows from gold and silver.
Strategy (63DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 23.75 p Short 24 p Short 30 c Long 30.25 c | 65% | +315 | -935 |
Short Strangle | Short 24 p Short 30 c | 73% | +3020 | x |
Short Put Vertical | Long 23.75 p Short 24 p | 85% | +125 | -1125 |
Symbol: Energy | Daily Change |
/CLM4 | -1.03% |
/HOK4 | -1.34% |
/NGK4 | -2.35% |
/RBK4 | -1.42% |
Crude oil moves lower
Crude oil futures (/CLM4) moved lower as the latest round of tensions between Israel and Iran fades, with the prospect of additional escalations fading for now.
Traders will likely keep the commodity propped above the $80 per barrel handle as sanctions on Iran are hashed out by the U.S. and the European Union. Traders are watching today’s inventory report from the American Petroleum Institute (API), due out at 15:30 UTC (10:30 a.m. Central Time).
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 72 p Short 73 p Short 89 c Long 90 c | 64% | +260 | -740 |
Short Strangle | Short 73 p Short 89 c | 71% | +1600 | x |
Short Put Vertical | Long 72 p Short 73 p | 82% | +140 | -860 |
Symbol: FX | Daily Change |
/6AM4 | +0.01% |
/6BM4 | +0.22% |
/6CM4 | -0.04% |
/6EM4 | +0.08% |
/6JM4 | -0.02% |
A rebound for the pound
The British pound (/6BM4) rebounded Tuesday after traders sold the currency on a shifting outlook for the Bank of England.
Strong economic data in the United Kingdom’s services sector for April helped stem the recent losses. However, with the BOE remaining on a likely dovish path, it would be hard for the recovery to play out beyond the short term unless we see a shift in the overall dovish tone from BOE members.
Strategy (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.21 p Short 1.215 p Short 1.265 c Long 1.27 c | 59% | +112.50 | -200 |
Short Strangle | Short 1.215 p Short 1.265 c | 67% | +450 | x |
Short Put Vertical | Long 1.21 p Short 1.215 p | 85% | +62.50 | -250 |
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.