Market Wrap – Major Call Option Level Defense Holds Seeing Stock Markets Give Up Gains

Deja Vu the 4800 on SPX and 180 on AAPL dominated the markets which saw a reversal across the board on semiconductors through the riskier tech names from green to red. Again, thin volumes and story stocks such as Biogen versi9ng after yesterday’s Samsung was proven to be unfounded. Oil bounced while natural gas collapsed expectedly after its storage report. On the speculative end we saw Cryptocurrencies down again. Treasury market steepening in the yield curve today driven by selling pressure at the back end. Around the table today we talk about Fed, inflation natural gas collapse, options, expiration, Bitcoin, Lithium and Uranium.

Enjoy live commentary from Our Trading Room at YouTube as the day wraps up – feel free to like and share

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In today’s post market wrap live from the trading room traders discuss the patterns through the options and futures markets that have played out perfectly from last week to today. Listen to our technical and market psychology read on the day. Join the Traders Community Podcast crew @traderscom @knovawave @Mayhem4Markets @abcdefg64668024 @Mahdavi4 and @MetaJohnny1 plot out the rest of 2021.

Market Closes

  • WTI crude futures increased 0.6%, or $0.45, to $76.01/bbl.
  • February Nymex natural gas (NGG22) closed down by -0.289 (-7.51%) after Weekly EIA natgas inventories on Thursday rose 136 bcf as expectations.  Atmospheric G2 models said that warmer-than-normal temperatures in the eastern U.S. should continue to curb heating demand for nat-gas through at least Jan 3.  
  • U.S. domestic natgas demand for heating has weakened as BNEF data shows lower 48-state natgas demand on Thursday was 84.5 bcf, down -5.1% y/y.
  • U.S. Dollar Index is down about -0.3% to $95.96.
  • JPY as the strongest of the major currencies, the CAD was the weakest.
  • Gold futures settled $8.30 (+0.5%) higher to $1,814.10/oz
  • Spot silver is down four cents or -0.19% at $23
  • Dow industrial average rose 36547.08 +148.87 (0.41%) up for 6 consecutive days
  • S&P index rose 4797.52 +11.17 (0.23%) (Intraday high 12/28 4807.02)
  • NASDAQ index fell 15760.84 -20.87 (-0.13%) down for second day
  • Russell 2000 2,248.15 +0.073%+1.65 
  • NYSE Adv 1843 Dec 1444 Vol 638.3 mln
  • Nasdaq Adv 2750 Dec 1878 Vol 3.7 bln
  • Apple 179.38▲ 0.09 (0.05%)
  • The obsession remains the price of Apple for 3 trillion market is $182.86
  • The S&P 500 has closed at 69 ATH this year, 2nd most ever only behind 77 ATHs in 1995
  • However, the average S&P 500 comp is down 18% from its ATH, suggesting severe weakness underneath the surface.
  • German Dax, +0.19%
  • France’s CAC, +0.24%
  • UK FTSE 100, +0.40%
  • Spain’s Ibex, +0.42%
  • Italy’s FTSE MIB, +0.10%
  • Italy, Germany, and Spain will be closed on Friday, Paris and London will trade for half a session ahead of the New Year

Cboe Daily Market Ratios:

Cboe Daily Market Statistics

S&P 500 sector watch:

  • Seven of the 11 S&P 500 sectors closed lower
  • Earlier all 11 S&P 500 sectors were trading higher.
  • No sector rose more than 0.4%.
  • Information technology (-0.7%) and energy (-0.7%) worse hit. The real estate (+0.4%),
  • Utilities (+0.3%), health care (+0.2%), and communication services (+0.1%) sectors closed higher.  

Markets YTD

  • S&P 500 +27.2% YTD
  • Nasdaq Composite +22.1% YTD
  • Dow Jones Industrial Average +18.9% YTD
  • Russell 2000 +13.9% YTD

Bonds

  • In the Treasury market bonds turned defensive throughout the day, leaving yields lower. The 2-yr yield decreased one basis point to 0.74%, and the 10-yr yield decreased three basis points to 1.52%.

News Highlights

Into The Vortex – EIA Reports -136 Bcf Draw in Natural Gas Storage – TRADERS COMMUNITY

Heading into Christmas and cold temperatures around us gas withdrawal season is in swing. While in Europe natural gas futures are back to near all-time highs again US natural gas futures are softer reacting to domestic weather models. Last week EIA reported a draw of -136 Bcf of working gas in storage lower than expected. With the global energy crisis LNG exports continue to grow but we balance supply shortages with deliverability.

52 Year Low Initial Jobless Claims Underscores the Tightness of US Labor Market – TRADERS COMMUNITY

Initial jobless claims continue to fall. The four-week moving average for initial claims at 199,250 is the lowest it has been since October 25, 1969, which reflects the tightness of the labor market. Americans filing for unemployment benefits fell to the lowest level of initial claims in 52 years. The labor market continues to recover from the coronavirus economic burdens. Demand for workers remains strong as the economy rebounds.

Biogen gave it all back after yesterday’s report from Korea Economic Daily indicating that Samsung Group is in negotiations to acquire the company for more than $40 billion being denied. The article cited “investment banking sources” for the news, again question an article that says based on ‘sources’ Yesterday $BIIB closed 257.92, +2.187, +9.3% so significant losses.

Iron Ore Prices Rise Pre-emptively on Easing Along China’s Property Curve – TRADERS COMMUNITY

Iron ore had the bears out in full force just a month or so ago, with the China attempt to “destroy Australia”, the shipping crisis and more. Analysts were anticipating demand for iron ore to collapse as China reduced its steel production. Targets were lowered to US$65 to $85 a tonne by many of the larger groups.  Here we are the most actively traded iron ore futures on the Dalian Commodity Exchange for May delivery closed 3.9% higher at 714 yuan ($112.11) per tonne, jumping 5% this week.

Drewry World Container Index 119% Higher Year on Year – TRADERS COMMUNITY

Drewry’s composite World Container Index is up 119% year on year and increased marginally to $9,304.05 per 40ft container heading into Christmas. The Baltic Exchange Dry Index fell for the eleventh session on Thursday, as weaker capesize rates overshadowed gains in the panamax vessel segment.

Looking ahead:

Trust you all had a great day, sleep well and get your trading plan sorted.

Any questions please feel free to ask them below. Trade Smart!