Nasdaq 100 Holds Record Highs as Yields Dip
Nasdaq 100 Holds Record Highs as Yields Dip
Also, 30-year T-bond, silver, natural gas and Euro futures
Nasdaq 100 E-mini futures (/NQ): +0.01%
30-year T-bond futures (/ZB): +0.29%
Silver futures (/SI): +0.40%
Natural gas futures (/NG): +0.28%
Euro futures (/6E): -0.99%
U.S. equity markets are holding onto their gains from yesterday which saw both the S&P 500 (/ESU4) and Nasdaq 100 (/NQU4) close at fresh record highs. Bond yields are coming back in despite a rise in energy prices, perhaps on a safe haven bid as the drumbeat of war intensifies between Israel and Hezbollah. Precious metals continue to tread water near critical support. In FX markets, the Japanese yen (/6JU4) continues to weaken as spot USD/JPY is rising back toward the 1990 high of 160.40. U.S. markets are closed tomorrow for the Juneteenth federal holiday.
Symbol: Equities | Daily Change |
/ESM4 | +0.01% |
/NQM4 | +0.06% |
/RTYM4 | -0.16% |
/YMM4 | -0.01% |
Nasdaq futures are slightly higher ahead of the open after retail sales data fueled rate cut bets, with swap markets leaning more toward two cuts on the data. The U.S. equity leader is on track to record a 9% gain this month, which would mark the best performance since November. Equity volume might be front-loaded today, given that U.S. markets are closed for a federal holiday on tomorrow. Lennar (LEN) fell 3% in pre-market trading after the home builder reported a subdued projection for projects.
Strategy: (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 19000 p Short 19250 p Short 21250 c Long 21500 c | 59% | +1385 | -3615 |
Short Strangle | Short 19250 p Short 21250 c | 67% | +4930 | x |
Short Put Vertical | Long 19000 p Short 19250 p | 81% | +745 | -4255 |
Symbol: Bonds | Daily Change |
/ZTU4 | +0.09% |
/ZFU4 | +0.18% |
/ZNU4 | +0.21% |
/ZBU4 | +0.29% |
/UBU4 | +0.32% |
Bonds are up across the curve, with the 30-year T-bond future rising about 0.21% at the New York open. That sentiment may prevail until Thursday when we get data on initial jobless claims and U.S. housing starts. The Treasury is set to auction 20-year bonds today, normally scheduled for Wednesday.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 113 p Short 115 p Short 123 c Long 125 c | 63% | +468.75 | -1531.25 |
Short Strangle | Short 115 p Short 123 c | 68% | +937.50 | x |
Short Put Vertical | Long 113 p Short 115 p | 88% | +171.88 | -1828.13 |
Symbol: Metals | Daily Change |
/GCQ4 | +0.15% |
/SIN4 | -0.24% |
/HGN4 | -0.89% |
Silver prices (/SIN4) advanced amid a softer dollar and lower Treasury yields. The metal has trended lower since May when prices hit levels not traded in over a decade, but the 50-day simple moving average (SMA) appears to be offering some support over the past few trading sessions. Thursday’s labor market data may provide the key to the metal’s next directional move.
Strategy (37DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 27 p Short 27.25 p Short 32.75 c Long 33 c | 63% | +375 | -875 |
Short Strangle | Short 27.25 p Short 32.75 c | 72% | +3035 | x |
Short Put Vertical | Long 27 p Short 27.25 p | 81% | +215 | -1035 |
Symbol: Energy | Daily Change |
/CLQ4 | +0.3% |
/HON4 | +0.74% |
/NGN4 | +1.94% |
/RBN4 | +0.73% |
Natural gas futures (/NGN4) are retracing some of yesterday’s losses, rising about 1.9% this morning. Production is holding at about 100 billion cubic feet per day (bcf/d), while demand has softened slightly over the past week. The Energy Information Administration (EIA) forecasts dry gas production will decline to 102.1 bcf/d in its short-term energy outlook (STEO). Stocks data is in focus, due out later this week.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2.75 p Short 2.8 p Short 3.1 c Long 3.13 c | 59% | +310 | -190 |
Short Strangle | Short 2.8 p Short 3.13 c | 58% | +3,000 | x |
Short Put Vertical | Long 2.75 p Short 2.8 p | 58% | +220 | -280 |
Symbol: FX | Daily Change |
/6AU4 | -0.37% |
/6BU4 | -0.06% |
/6CU4 | -0.08% |
/6EU4 | +0.14% |
/6JU4 | -0.46% |
Euro futures (/6EU4) advanced against a softer dollar backdrop after U.S. data softened the U.S. currency. The Eurozone will see a slew of economic data due out later this week, including consumer confidence and purchasing manager’s index (PMI) data, which could influence the currency’s direction. The Euro now makes up only 20% of global foreign exchange reserves, according to a report from the European Central Bank (ECB) released last week.
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.065 p Short 1.07 p Short 1.09 c Long 1.095 c | 32% | +387.50 | -237.50 |
Short Strangle | Short 1.07 p Short 1.09 c | 54% | +1,730 | x |
Short Put Vertical | Long 1.065 p Short 1.07 p | 73% | +175 | -450 |
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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