Nasdaq 100 Turnaround on Track for All-Time Highs
Nasdaq 100 Turnaround on Track for All-Time Highs
Also 30-year T-bond, gold, crude oil and British pound futures
- Nasdaq 100 E-mini futures (/NQ): +0.60%
- 30-year T-bond futures (/ZB): -0.03%
- Gold futures (/GC): +0.70%
- Crude oil futures (/CL): +0.31%
- British pound futures (/6B): -0.13%
A generally positive drift to earnings amid strong U.S. economic data has provoked a sideways churn in stocks and a more meaningful pullback in U.S. Treasury bonds. For the latter, the situation has stabilized after the Tuesday-Wednesday weakness, with measures of volatility slumping into the end of the week. A lackluster earnings and macroeconomic calendar for today puts the monthly options expiry in focus as the biggest catalyst ahead of the weekend.
Symbol: Equities | Daily Change |
/ESH4 | +0.35% |
/NQH4 | +0.60% |
/RTYH4 | +0.10% |
/YMH4 | +0.36% |
The sharp turnaround on yesterday afternoon is finding modest follow-through to the upside today for each of the four major U.S. equity indexes. At the top of the heap is the Nasdaq 100 (/NQH4), which has enjoyed a tailwind in the form of the Taiwan Semiconductor (TSM) earnings report and its implications for the AI-growth narrative. A close at its current level would constitute a fresh all-time high for the tech-heavy index.
Strategy: (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 16600 p Short 16700 p Short 17700 c Long 17800 c | 52% | +1025 | -975 |
Long Strangle | Long 16600 p Long 17800 c | 25% | x | -5925 |
Short Put Vertical | Long 16600 p Short 16700 p | 80% | +435 | -1565 |
Symbol: Bonds | Daily Change |
/ZTH4 | -0.08% |
/ZFH4 | -0.12% |
/ZNH4 | -0.10% |
/ZBH4 | -0.03% |
/UBH4 | +0.12% |
30-year T-Bond futures (/ZBH4) are down again today, with prices now at the 50-day simple moving average. Economic data has increased the likelihood of a soft landing but has also pushed back the odds for when we will see the first rate cut from the Federal Reserve. San Francisco Fed President Mary Daly will speak today at a San Diego County economic roundtable.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 116 p Short 117 p Short 123 c Long 124 c | 51% | +421.88 | -578.13 |
Long Strangle | Long 116 p Long 124 c | 31% | x | -1015.63 |
Short Put Vertical | Long 116 p Short 117 p | 78% | +218.75 | -781.25 |
Symbol: Metals | Daily Change |
/GCG4 | +0.70% |
/SIH4 | +0.08% |
/HGH4 | +0.81% |
Despite a higher dollar and rising Treasury yields, gold futures (/GCG4) are up about 0.62% this morning ahead of the opening bell. Still, the precious metal is on track to record a loss for the week as traders continue to recalibrate bets on when the Federal Reserve will start to cut interest rates.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2020 p Short 2025 p Short 2085 c Long 2090 c | 31% | +310 | -190 |
Long Strangle | Long 2020 p Long 2090 c | 42% | x | -3140 |
Short Put Vertical | Long 2020 p Short 2025 p | 70% | +180 | -320 |
Symbol: Energy | Daily Change |
/CLG4 | +0.31% |
/HOG4 | +0.71% |
/NGG4 | -3.97% |
/RBG4 | -0.06% |
Crude oil future (/CLG4) are on track to close the week out with a gain of nearly 2% as cold weather across the United States caused rigs to shutdown, throttling production amid ongoing supply disruptions in the Middle East. The prompt spread in the futures market turned positive this week, indicating some tightening in the market.
Strategy (56DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 71 p Short 71.5 p Short 77.5 c Long 78 c | 25% | +360 | -140 |
Long Strangle | Long 71 p Long 78 c | 44% | x | -4650 |
Short Put Vertical | Long 71 p Short 71.5 p | 60% | +190 | -310 |
Symbol: FX | Daily Change |
/6AH4 | +0.40% |
/6BH4 | -0.13% |
/6CH4 | +0.17% |
/6EH4 | +0.13% |
/6JH4 | -0.01% |
British pound futures (/6BH4) are down slightly after retail sales data showed that consumers in the United Kingdom are making fewer purchases, a good sign for the Bank of England’s fight against inflation, although data earlier this week showed that price pressures remain. The next policy meeting is on Feb. 1, when the bank is expected to hold rates at a 15-year high of 5.25%.
Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.25 p Short 1.255 p Short 1.285 c Long 1.29 c | 39% | +175 | -137.50 |
Long Strangle | Long 1.25 p Long 1.29 c | 38% | x | -656.25 |
Short Put Vertical | Long 1.25 p Short 1.255 p | 76% | +93.75 | -218.75 |
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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