Nasdaq Holds Weekly Gain as Copper Surges on China Data
Nasdaq Holds Weekly Gain as Copper Surges on China Data
Also, 2-year T-note, copper, crude oil and Japanese yen futures
Nasdaq 100 e-mini futures (/NQ): +0.09%
Two-year T-note futures (/ZT): -0.01%
Copper futures (/HG): +2.77%
Crude oil futures (/CL): +0.10%
Japanese yen futures (/6J): -0.22%
Risk sentiment is subdued going into the weekend this Friday morning but gains from the week set us up for another potential rally in equities next week.
The Dow Jones is holding above the psychologically important 40,000 level and S&P 500 futures are hovering above 5,300.
Bitcoin prices (/BTCK4) are 2% higher and bonds are holding onto weekly gains. There is little event risk left besides for several Fed members due to speak today. Silver and gold are rising after Chinese data showed strong economic activity globally.
Symbol: Equities | Daily Change |
/ESM4 | +0.08% |
/NQM4 | +0.09% |
/RTYM4 | +0.12% |
/YMM4 | +0.06% |
Nasdaq on track to a good month
Nasdaq futures (/NQM4) are largely muted Friday morning as traders take stock of equity markets that are trading at or near all-time highs.
The Nasdaq is on track to record its best monthly gain since December. Much of the event risk for equities is over for the week but traders are turning focus toward next week when we will see Nvidia (NVDA) earnings cross the wires.
Strategy: (34DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 18,300 p Short 18,400 p Short 18,900 c Long 19,000 c | 26% | +1,375 | -630 |
Short Strangle | Short 18,400 p Short 18,900 c | 52% | +8,615 | X |
Short Put Vertical | Long 18,300 p Short 18,400 p | 65% | +610 | -1,390 |
Symbol: Bonds | Daily Change |
/ZTM4 | -0.01% |
/ZFM4 | -0.06% |
/ZNM4 | -0.11% |
/ZBM4 | -0.32% |
/UBM4 | -0.41% |
Bonds move a bit lower
Bonds fell slightly across much of the curve on Friday morning amid a quiet market backdrop going into the weekend.
Two-year T-note futures (/ZTM4) were down 0.02% this morning, although bond yields remained lower on the week, with the underlying yield on the instrument trading at 4.799%.
Federal Reserve governor Christopher Waller will speak today, and his comments will be closely watched following this week’s labor market data that showed an increase in continuing jobless claims.
Strategy (35DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 101.625 p Short 101.75 p Short 102.25 c Long 102.375 c | 23% | +140.63 | -109.38 |
Short Strangle | Short 101.75 p Short 102.25 c | 38% | +531.25 | X |
Short Put Vertical | Long 101.625 p Short 101.75 p | 93% | +62.50 | -187.50 |
Symbol: Metals | Daily Change |
/GCM4 | +0.98% |
/SIN4 | +3.09% |
/HGN4 | +2.77% |
Copper moves sharply higher
Copper prices (/HGN4) are up almost 3% after China reported a pickup in industrial output in April, rising 6.7% from a year ago and up from the 4.5% pace seen in March.
The data immediately sent copper higher amid an already bullish backdrop for the metal, which is seen entering a period of supply deficits over the next few years.
Strategy (39 DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 4.9 p Short 4.91 p Short 5.2 c Long 5.25 c | 63% | +497.50 | -762.50 |
Short Strangle | Short 4.91 p Short 5.2 c | 58% | +8,250 | X |
Short Put Vertical | Long 4.9 p Short 4.91 p | 57% | +112.50 | -125.00 |
Symbol: Energy | Daily Change |
/CLM4 | +0.10% |
/HOM4 | +0.97% |
/NGM4 | +4.09% |
/RBM4 | +0.26% |
Crude oil rises again
Crude oil prices (/CLM4) are up again this morning, albeit at a slower pace from yesterday, as traders assessed economic data out of China that showed strong external demand from the global economy.
Oil traders are betting that a bottom was put in this week after prices bounced off the lowest levels traded since February amid signs of slowing demand.
This week’s report from the U.S. Energy Information Administration (EIA) showed a decline in fuel stocks, which were met with a sign of optimism, suggesting that demand may be picking up.
Crack spreads—which measure the premium that refiners get from turning oil into fuel—rose again Friday, supporting the recovery demand thesis. Still, we need more follow through, and gasoline demand needs to continue rising as we head into the summer driving season.
Strategy (28 DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 77 p Short 77.5 p Short 80.5 c Long 81 c | 24% | +360 | -140 |
Short Strangle | Short 77.5 p Short 80.5 c | 52% | +2,820 | X |
Short Put Vertical | Long 77 p Short 77.5 p | 61% | +170 | -330 |
Symbol: FX | Daily Change |
/6AM4 | +0.07% |
/6BM4 | +0.09% |
/6CM4 | +0.04% |
/6EM4 | -0.05% |
/6JM4 | -0.22% |
The yen drifts lower
Japanese yen futures (/6JM4) are little changed on the week as prices drift slightly lower Friday morning.
Today’s focus is the Commitments of Traders report (COT) which comes out this afternoon. Traders are eager to see how funds have been positioning themselves following Japan’s intervention earlier this month and in April. However, the dollar is the main driver for the currency market and Fed rate cut bets will remain the driving force.
Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.0064 p Short 0.00645 p Short 0.00665 c Long 0.0067 c | 43% | +325 | -300 |
Short Strangle | Short 0.00645 p Short 0.00665 c | 59% | +1,025 | x |
Short Put Vertical | Long 0.0064 p Short 0.00645 p | 77% | +162.50 | -462.50 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.