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Morning Report By Indexconnect
June 24, 2010
Fed Doesn’t Seem That Friendly Traders are defined by one thing. Whether it’s on a minute to minute basis, an hourly basis, a daily or even a monthly basis, it’s all about one thing. And it’s called a P&L. You know a profit and loss statement! It’s like a score card or a report card but in this instance if you don’t get good grades for sure you won’t be invited back. It’s a rough world. The stock market is “churning “ again and while it’s holding it also has the feel that if someone said boo, it would just fall apart. In the very beginning of the credit crisis, long before it was even in the papers the Pit Bull told me there was rotten wood floating around in the financials. He also said something even more staggering which was that there was going to be an enormous shift of wealth out of the United States. As we all know the US has been the top dog for so long who would guess how rapidly thing would deteriorate. As we look back we should have all known when places like Goldman and JP started handing out billion of $$$$$ in bonuses. Hell yes, the traders that make money deserve it, but where is it that the head of a big firm like that can make 100-500 mil? All this excess has led to an enormous SHRINK DOWN. Come Jan 2011 that SHRINK DOWN is going to come in the form of firms not keeping up with Wall Streets estimates and expectations. It is a changed world. They say trading is a ZERO SUM GAME but you know what tell that to all the people that lost during the sub prime melt down that didn’t even know what credit derivatives were.
We could do a big report but you can see it on the chart above. The SPU opened 1-2 handles higher at the 1091.50 to 1092.00 level, chopped sideways to a few handles lower until 9:00 when the Home Sales numbers showed a record plunge of 33% sending the SPU straight down to 1080.20. After that it was chop, chop, chop until the SPU started to short cover going into the FED decision. At 1:17 when the FED made its announcement the SPU sold off again and then regained its footing and rallied all the way up to new highs at 1095.50 then had an 11
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Morning Report By Indexconnect
June 24, 2010
handled sell off back down to 1084ish and then went on to settle at 1087.40 on the 3:15 futures close. In the end all we got to say is it could have been worse. Thursday? The main head line out this morning is “World Stock Slide on FED Caution” In Asia 7 out of 11 markets closed lower. I Europe 10 out of 10 are trading lower. Today we have 2 economic releases; Durable Good and Jobless Claims at 7:30 ct and the Nat Gas numbers at a 9:30. Its 6:30 am and the SPU is down 7.60 handles, trading under the 1080.00 level, crude is down .26 cents and the EURO is down 26. Our call? It doesn’t seem like this is over yet and we have the Jobless Claims number out at 7:30. We though the market would start to firm going into the end of the weak, so far we are not seeing that. But with the big down open we also think we will see a bounce. We think it will be a 2 way trade, down in the fist part and up in the second part. You take it from there…
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Morning Report By Indexconnect
June 24, 2010
TODAY’S PIVOTS FROM CHICAGOSTOCK ESU0 September Emini SP500 Intraday Pivot----------1087.67 3day Pivot----------1098.92
Range---1087.33-1088.00
CLQ0 August Crude Oil Intraday Pivot----------76.34 3day Pivot----------77.21
Range---76.24-76.43
GCQ0 August Gold Intraday Pivot----------1234.7 3day Pivot----------1242.1
Range---1234.6-1234.8
Range---1092.96-1104.88
Range---76.87-77.56
Range---1238.3-1245.9
Copyright © 2010 Drakon Capital, LLC. All rights reserved.
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info@drakoncapital.com info@drakoncapital.com
Morning Report By Indexconnect
June 24, 2010
About Drakon Capital Drakon Capital delivers market-driven, real-time trading intelligence to institutional clients in the equity and equity derivatives markets. Headed by Guy Adami, formerly with Drexel Burnham, Goldman Sachs, and CIBC, Drakon Capital develops client-focused research in portfolio strategy, derivatives, and equities, based on its own proprietary analytical system. Our clients use these market-driven insights and trading ideas to refine their own strategies.
About Indexconnect Indexconnect is a group of veteran of traders and market technicians who have been providing their IM service to their trading customers for more than 15 years. Centralized in the index markets with their desk 10 feet from the S&P 500 futures pit, Indexconnect can provide unique perspective and live quotes from every pit at the CME. They currently provide their services to many of the world's larger hedge funds and prop trading desks.
Disclaimers This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional financial, tax and legal advisors. Nothing in this report is intended to be a recommendation to buy or sell any futures or options contract. Information furnished by others, upon which all of the portions of this report are based, is believed to be reliable at the time of publication but has not been verified and no warranty is given as to the accuracy of such information. Drakon Capital, LLC and its affiliates accept[s] no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damage even if advised of the possibility of such damages. Drakon Capital, LLC does not guarantee the accuracy or completeness of the information contained in this report or any analysis based thereon.
Copyright Š 2010 Drakon Capital, LLC. All rights reserved.
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