S&P 500 Rally Continues into Fresh All-Time High
S&P 500 Rally Continues into Fresh All-Time High
Also 30-year T-bond, gold, natural gas and Australian dollar futures
- S&P 500 E-mini futures (/ES): +0.19%
- 30-year T-bond futures (/ZB): +0.08%
- Gold futures (/GC): +0.06%
- Natural gas futures (/NG): +0.73%
- Australian dollar futures (/6A): -0.09%
Global equity markets continued their strong week overnight, with U.S. equity index futures pointing to a continuation of the surge that began Wednesday afternoon following the Nvidia (NVDA) earnings report. Hawkish commentary from Federal Reserve officials and weaker bond auctions continue to pressure Treasuries. Despite mostly higher yields, the U.S. dollar is down against each of its major counterparts.
Symbol: Equities | Daily Change |
/ESH4 | +0.31% |
/NQH4 | +0.34% |
/RTYH4 | +0.06% |
/YMH4 | +0.28% |
Equity markets are pointing higher this morning as the post-Nvidia rally continues, with the S&P 500 futures (/ESH4) rising about 0.33% ahead of the opening bell. The question for traders today will be whether to take some profits off the table or continue pushing into fresh highs going into the weekend.
Strategy: (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 5100 p Short 5120 p Short 5240 c Long 5260 c | 22% | +725 | -275 |
Short Strangle | Short 5120 p Short 5240 c | 50% | +6112.50 | x |
Short Put Vertical | Long 5100 p Short 5120 p | 64% | +325 | -675 |
Symbol: Bonds | Daily Change |
/ZTM4 | -0.02% |
/ZFM4 | -0.03% |
/ZNM4 | -0.03% |
/ZBM4 | -0.03% |
/UBM4 | +0.03% |
30-year T-Bond futures (/ZBH4) are little changed this morning and is on track to record a slight loss for the week. However, signs are pointing to a possible turning point for the recent downtrend, with losses slowing significantly from the preceding weeks. There is little economic data due today and no auctions from the Treasury. But next week will kick off with offerings for the two-, five- and seven-year notes on Monday and Tuesday, which may help to decide if bonds are bottoming.
Strategy (63DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 113 p Short 114 p Short 122 c Long 123 c | 51% | +421.88 | -578.13 |
Short Strangle | Short 114 p Short 122 c | 63% | +1765.63 | x |
Short Put Vertical | Long 113 p Short 114 p | 81% | +203.13 | -796.88 |
Symbol: Metals | Daily Change |
/GCJ4 | +0.22% |
/SIK4 | -0.06% |
/HGK4 | -0.85% |
Gold prices (/GCJ4) are up slightly today but trading within its weekly range near the 2,030 mark as bond selling moderates and the dollar wanes. Earlier this week, Newmont (NEM) said it will produce 6.93 million ounces of gold this year, which is up from 5.5 million in 2023. Higher gold prices are helping to encourage miners to maximize operations even amid record high operational costs. While these production targets won’t affect gold in the short term, there are potential consequences for prices in the mid- to long-term.
Strategy (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2000 p Short 2010 p Short 2090 c Long 2100 c | 48% | +440 | -560 |
Short Strangle | Short 2010 p Short 2090 c | 62% | +2050 | x |
Short Put Vertical | Long 2000 p Short 2010 p | 81% | +200 | -800 |
Symbol: Energy | Daily Change |
/CLJ4 | -1.81% |
/HOJ4 | -1.05% |
/NGJ4 | -5.60% |
/RBJ4 | -1.84% |
Natural gas prices (/NGH4) are down over 6% this morning to extend yesterday’s decline, which came after a 10% surge in prices on Wednesday that was sparked by Chesapeake’s announced production cut, which squeezed shorts out of the trade. Fundamental factors are back in the driver’s seat now, with warmer-than-average weather on the horizon that will likely extend a supply glut in the market.
Strategy (31DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.5 p Short 1.55 p Short 1.95 c Long 2 c | 44% | +250 | -250 |
Short Strangle | Short 1.55 p Short 1.95 c | 60% | +1260 | x |
Short Put Vertical | Long 1.5 p Short 1.55 p | 67% | +150 | -350 |
Symbol: FX | Daily Change |
/6AH4 | +0.22% |
/6BH4 | +0.24% |
/6CH4 | +0.11% |
/6EH4 | +0.09% |
/6JH4 | +0.05% |
Australian dollar futures (/6AH4) continue to benefit from moves in China, where policymakers are taking increasingly aggressive steps to underpin the economy and financial markets. The risk-on sentiment created by Nvidia’s earnings report is also helping to fuel gains in the risk-on currency. However, a sustained rally is in doubt with China’s economy facing structural problems that may not be solved by monetary policy moves. Prices for some of Australia’s top exports, such as iron ore, are trading well below recent highs.
Strategy (42DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.64 p Short 0.645 p Short 0.675 c Long 0.68 c | 62% | +160 | -340 |
Short Strangle | Short 0.645 p Short 0.675 c | 69% | +410 | x |
Short Put Vertical | Long 0.64 p Short 0.645 p | 85% | +80 | -420 |
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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