S&P 500 Climbs After Retail Sales Calms Economic Fears
S&P 500 E-mini futures (/ES): +1.00%
30-year T-note futures (/ZB): -1.45%
Silver futures (/SI): +3.08%
Natural gas futures (/NG): +1.31%
Japanese yen futures (/6J): -1.14%
A stronger-than-expected retail sales report for July showed consumers continue to spend, with the measure excluding autos rising 0.4% from the month before vs. the 0.1% expected increase. That, along with a decline in weekly initial jobless claims, assuaged fears of an economic recession, prompting a risk-on response from traders.
Symbol: Equities | Daily Change |
/ESU4 | +1.00% |
/NQU4 | +1.23% |
/RTYU4 | +2.20% |
/YMU4 | +1.22% |
S&P 500 contracts(/ESU4) rose 1% at the opening bell, with the move putting prices at the highest level since Aug. 1 and retracing about 70% of the recent sell-off from July. A clearer path for rate cuts with less economic uncertainty following this week’s data is helping to revive market sentiment.
Strategy: (35DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 5470 p Short 5475 p Short 5580 c Long 5590 c | 55% | +320 | -180 |
Short Strangle | Short 5475 p Short 5580 c | 48% | +6537.50 | X |
Short Put Vertical | Long 5470 p Short 5475 p | 61% | +75 | -175 |
Symbol: Bonds | Daily Change |
/ZTU4 | -0.28%% |
/ZFU4 | -0.60% |
/ZNU4 | -0.82% |
/ZBU4 | -1.45% |
/UBU4 | -1.88% |
Treasuries fell across the curve as yields rose in response to this morning’s better-than-expected economic data. Next week’s Jackson Hole event and the Federal Open Market Committee (FOMC) minutes could influence where yields go from here.
Strategy (36DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 120 p Short 121 p Short 124 c Long 125 c | 33% | +625 | -375 |
Short Strangle | Short 121 p Short 124 c | 55% | +2281.25 | X |
Short Put Vertical | Long 120 p Short 121 p | 72% | +281.25 | -718.75 |
Symbol: Metals | Daily Change |
/GCZ4 | +0.20% |
/SIU4 | +3.08% |
/HGU4 | +2.64% |
Silver futures (/SIU4) surged today as gold prices (/GCZ4) lagged. That is a reversal from the general trend we’ve seen over the last couple of months, which pushed the gold-silver ratio above 90. A reversal of that trend, if it continues, could see silver outperform gold for the next couple of weeks as that ratio normalizes.
Strategy (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 27.75 p Short 28 p Short 29.5 c Long 29.75 c | 23% | +935 | -320 |
Short Strangle | Short 28 p Short 29.5 c | 55% | +8345 | X |
Short Put Vertical | Long 27.75 p Short 28 p | 58% | +565 | -680 |
Symbol: Energy | Daily Change |
/CLU4 | +1.19% |
/HOU4 | +0.13% |
/NGU4 | +1.31% |
/RBU4 | +1.41% |
Natural gas futures (/NGU4) continued higher today following yesterday’s strength as traders prepare for today’s inventory data from the Energy Information Administration (EIA). Analysts expect a build of 43 billion cubic feet (Bcf) for the week ending Aug. 9, but that might be slightly too optimistic. Meanwhile, crude oil prices are moving higher.
Strategy (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2.25 p Short 2.3 p Short 2.55 c Long 2.57 c | 55% | +280 | -220 |
Short Strangle | Short 2.3 p Short 2.55 c | 56% | +2790 | X |
Short Put Vertical | Long 2.25 p Short 2.3 p | 54% | +230 | -270 |
Symbol: FX | Daily Change |
/6AU4 | +0.21% |
/6BU4 | +0.07% |
/6CU4 | -0.03% |
/6EU4 | -0.44% |
/6JU4 | -1.14% |
A rebound in the dollar and Treasury yields are pushing Japanese yen futures (/6JU4) lower this morning, dropping over 1%. Despite the recent pullback in yen prices, the currency remains on track to record a monthly gain halfway through August, although upside momentum from last month has faded considerably.
Strategy (50DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.0067 p Short 0.00675 p Short 0.0069 c Long 0.00695 c | 26% | +437.50 | -187.50 |
Short Strangle | Short 0.00675 p Short 0.0069 c | 50% | +1862.50 | X |
Short Put Vertical | Long 0.0067 p Short 0.00675 p | 68% | +237.50 | -387.50 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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