Nasdaq, 30-year T-Bond, Gold, Crude and the Aussie Dollar
Nasdaq, 30-year T-Bond, Gold, Crude and the Aussie Dollar
Five futures in focus. Right here, every weekday morning.
- Nasdaq 100 E-mini-futures (/ES): -0.91%
- 30-Year T-bond (/ZB): +0.37%
- Gold futures (/GC): +0.22%
- Crude oil (/CL): -0.85%
- Australian dollar futures (/6A): -0.20%
Symbol: Equities | Daily Change |
/ESU3 | -0.65% |
/NQU3 | -0.91% |
/RTYU3 | -0.72% |
/YMU3 | -0.51% |
The deleveraging in stocks continues, with /NQU3 leading the way lower. Significant technical damage has been levied recently, with /NQU3 breaking the uptrend from its March and May swing lows, bringing into focus the trendline from the January and March lows–effectively the backbone of the 2023 rally–closer to 14,400 over the coming sessions.
Strategy (0DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron condor | Long 14625p Short 14630p Short 14650c Long 14660c | 53% | +130 | -55 |
Long strangle | Long 14630p Long 14650c | 51% | x | -2215 |
Short put vertical | Long 14625p Short 14630p | 52% | +45 | -55 |
Symbol: Bonds | Daily Change |
/ZTU3 | +0.06% |
/ZFU3 | +0.21% |
/ZNU3 | +0.31% |
/ZBU3 | +0.37% |
/UBU3 | +0.28% |
"De-risking" equities
The sell-off in bonds may have sparked the de-risking in U.S. equity markets, but the pain may have become so great that a more normal “risk aversion” type of environment is developing, where U.S. Treasury bonds are becoming bid once again. Yields are down across the curve on Friday, with the biggest move coming in /ZBU3.
Strategy (1DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron condor | Long 118p Short 118.5p Short 119.5c Long 120c | 61% | +156.25 | -343.75 |
Long strangle | Long 118.5p Long 119.5c | 35% | x | -203.13 |
Short put vertical | Long 118p Short 118.5p | 83% | +62.50 | -437.50 |
Symbol: Metals | Daily Change |
/GCU3 | +0.22% |
/SIU3 | +0.20% |
/HGU3 | -0.35% |
Bond buyers back in the market
/GCU3 and /SIU3 traded higher in early morning trade Friday as bond buyers stepped back into the market amid a ripping selloff as traders second-guessed their views on the Fed’s rate hiking cycle. Initial jobless claims for the week ending Aug. 12 came in at +239,000, slightly lower than the +240,000 Bloomberg consensus estimate. China contagion fears may also be working against the recent contraction in Fed rate cut bets.
/GCU3’s Relative Strength Index (RSI) remains oversold at 28.4. A cross back into neutral territory above 30 may signal a potential turning point in the preceding downtrend, or a temporary revival.
Strategy (0DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron condor | Long 1900 P Short 1895 P Long 1885 C Short 1880 C | 36% | 370 | -130 |
Long strangle | Long 1925 P Long 1915 C | 48% | x | -1430 |
Short put vertical | Short 1915 C Long 1910 C | 18% | 470 | -30 |
Symbol: Energy | Daily Change |
/CLU3 | -0.85% |
/NGU3 | -3.05% |
China headlines continue to plague demand-sensitive oil prices. Foreign direct investment (FDI) fell 4% y/y in China to $105.12 billion through the first seven months of 2023, according to government data released overnight. As one of the largest oil consumers, the flagging slowdown has degraded the demand outlooks even amid OPEC cuts. Baker Hughes will release rig numbers for the U.S. at 13:00 ET.
/CLU3 is below the psychologically important 80 handle. RSI bounced from its 50 mid-point, which is encouraging from a technical perspective and may signal that selling pressure has eased. That said, if prices continue lower, traders may look for some congestion at the rising 50-day simple moving average.
Strategy (0DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron condor | Long 80.25 P Short 80 P Long 79.25C Short 79.5 C | 32% | 200 | -50 |
Long strangle | Long 80 P Long 79.5 C | 34% | x | -750 |
Short put vertical | Short 79.5 C Long 79.25 C | 39% | 160 | -90 |
Symbol: FX | Daily Change |
/6AU3 | -0.20% |
/6BU3 | -0.27% |
/6CU3 | -0.17% |
/6EU3 | -0.10% |
/6JU3 | +0.31% |
Weak Chinese FDI data spilled over into FX markets, with the Chinese-sensitive /6AU3 accumulating additional losses overnight. This marks the sixth consecutive session of losses for the Australian dollar, and the eighth time in the past nine days. /6AU3 is now trading at its lowest levels since last November.
Strategy (21DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron condor | Long 0.635p Short 0.6375p Short 0.6425c Long 0.645c | 20% | +210 | -40 |
Long strangle | Long 0.6375p Long 0.6425c | 45% | x | -1130 |
Short put vertical | Long 0.635p Short 0.6375p | 59% | +110 | -140 |
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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