CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
The Cyprus situation continues to cause consternation among traders, but the IMF gave Cyprus until Monday to decide if they will meet their demands, so hopefully transparency will improve. The fly on the wall is going profit coming out of this. Unfortunately, I don’t know that fly but I expect volatility to increase due to rumors and news.
The most likely outcome of this situation is increased liquidity, imo.
We need to watch how the last 45 minutes trades today. Is there a bid, or are traders unwilling to take positions home over the weekend? Unless we hear some positive news/rumors that places a bid under risk assets, I vote for the latter because traders will take gains with uncertainty in the air.
As I said yesterday, traders with a lower risk profile should be lowering portfolio exposure. Professional traders have the trading range to watch, but if you are not at your workstation all day, taking gains is a good idea until Monday.
Gold is slightly lower this morning as it struggles to move above the $1620 level. An upside break of that level should cause short covering and a profitable pop for the longs (FD: we are long gold and gold shares).
Numerous shorts are exiting their mining stock positions which kicked in a buy signal in the Bullish Percent Index:
You can see that it has finally up-ticked from extremely oversold levels.
The GDX trade study is all in now with the final third triggered yesterday:
I have noted two levels that I would consider placing stops. The lowest level would probably have a worst case loss of six or seven percent. We are not long GDX, although we are long CEF and individual gold mining stocks, so in essence, we are long this trade.
Have a great trading day and weekend!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||21.27 (0.88%)||Components, Chart, More|
||0.90 (0.03%)||Components, Chart, More|
||10.93 (0.29%)||Components, Chart, More|
||9.31 (0.12%)||Components, Chart, More|
||2.81 (0.80%)||Components, Chart, More|
|^OSEAX||OSE All Share||521.40
||0.56 (0.11%)||Components, Chart, More|
||3.61 (0.97%)||Components, Chart, More|
||36.63 (0.47%)||Components, Chart, More|
||0.82 (0.01%)||Components, Chart, More|
||1.84 (0.19%)||Chart, More|
||0.00 (0.00%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||915.15
||9.71 (1.05%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from Seeking Alpha
Mar21: 2:44 PM Production of a cheaper iPhone will likely start in June, says Jefferies’ Peter Misek in an afternoon note that’s helping Apple (AAPL +0.7%) outperform. Foxconn and Jabil (JBL) are expected to provide plastic cases. Misek and other sell-side analysts have already predicted a less costly iPhone will arrive this year, though some claim its case will use a composite rather than plastic. Meanwhile, Apple received top marks in J.D. Power’s U.S. smartphone satisfaction study for the 9th straight time – its score of 855 is slightly above a prior 849, and well above an average of 796.
Mar22: 8:06 AM Cnooc (CEO) says its 2012 profit fell 9.3% due to higher costs for exploration and operating in Canada’s oil sands. Revenue rose 2.8% to 247.6B yuan from 240.9B on higher oil and gas sales. Cnooc’s largest domestic offshore field, Penglai 19-3, was shut because of a spill, hindering production growth. Says it will increase expense on drilling new wells and exploring for resources by 52% Y/Y.
Dow Chemical (DOW)
Mar21: 5:13 PM Dow Chemical’s (DOW) effort to limit U.S. natural gas exports would effectively create a price cap for the commodity, an Exxon (XOM) executive says. Dow begs to differ, of course, but it has concerns about “a tipping point at which LNG exports turn from a net positive for this nation to a net negative… Once you hit that point, it’s too late to go back.”
Mar21: 8:42 PM Though Intel’s (INTC) superb credit rating has allowed it to issue dirt-cheap debt to finance buybacks, “leverage works best when a company is growing,” cautions Bernstein’s Stacy Rasgon. The chip giant’s aggressive cash-return strategy has already led net cash to fall below $5B, its lowest level since ’95. Now, with weak PC demand pressuring sales, capex about to surge, and a 4.2% dividend soaking up over half of free cash flow, Intel probably has little choice but to either slow its buyback activity or further weaken its net cash balance.
Mar21: 12:34 PM Novartis (NVS -0.9%) says that new data presented at the 65th annual meeting of the American Academy of Neurology analysis shows Gilenya, a treatment for relapsing forms of multiple sclerosis, significantly reduced rate of brain volume loss across three large Phase III studies
Silver Wheaton (SLW)
Mar22: 6:15 AM Silver Wheaton Corp. (SLW) declares $0.14/share quarterly dividend. Forward yield 1.80%. For shareholders of record Apr. 02. Payable Apr. 12. Ex-div date Mar. 28. 6:03 AM Silver Wheaton (SLW): Q4 EPS of $0.50 beats by $0.01. Revenue of $287.2M beats by $27.8M.
Toyota Motors (TM)
Mar22: 8:40 AM Another electric vehicle bombshell: A new report from McKinsey indicates a third of all electric vehicle owners in Japan say they won’t buy another with the nation’s infrastructure not yet ready to support a network of charging stations. Sluggish sales and the looming threat of federal subsidies getting pulled away seems to have more major automakers subtly shifting their focus toward hybrid production instead of pure EVs.
Vad’s Catch of the Day
Kaimu’s Sound Money