Thank you guys for joining me and welcome to Episode 10 of Season 2 brought to you by Magnelibra Trading & Research (MTR). This episode is entitled “Big Buyers Step in Early and Palantir Euphoric After the Close”
Quick Disclaimer: The following podcast is for educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and may not be appropriate for all listeners.
As you guys know the Trump Administration is the new volatility creator and yesterday, well it certainly delivered. The equity markets opened deep in the red as weekend rhetoric of continued tariffs, were met with the open of stock trading in NY on Monday morning. However by mid morning, word on the street about a good conversation with the Mexican president who agreed to supply troops to the border in return for a month delay on the tariffs, sent the big institutional buyers in and lifted stocks well off the lows.
We noted this move here below in the SP500 futures:
5940 held and the market propelled right back up to the 6000 marker but continues to play tag with our 6042 level:
As you know this is our pivot level and it will remain as a magnet, but yesterday’s buyers have set the stage for the bulls to regain this level on the weekly chart. One thing that could give the bulls ample fuel is the mechanical buyers are trying to stage a setup that is similar to the August/September period after posting that initial August low. A close above 6042 this week would keep this technical picture on the bulls side. However it is important to note that the SP500 has been at this level for over 3 months now. This is a decent time frame consolidation and it does make this 6042 level that much more important on the weekly time frames for the overall market sentiment, direction and tone.
The Nasdaq futures are right at their pivot again as well the 21608 area:
We have to recognize these important levels because a lot of the flows are dominated by fast money algo types and they use these as markers. Its as if the charts themselves expose these values that are created over a given time series. Honestly it doesn’t matter if you trade in and out on a micro level or if you are a position trader with a longer term time horizon. The goal for both parties is Alpha, it is always the same goal its just a different road that leads to the same destination.
This is what makes trading and investing so unique, it brings together millions of people who share a common goal and no matter what their background is, no matter what their investment size is, everyone is participating for the same exact reasons. So if everyone is in it for the same thing, well then the best thing for each individual is to hone their own skill sets and develop an acumen that is so acute, that no matter what decisions that you are faced with, you know EXACTLY what to do.
Honestly that is a big factor and determinant in ones success. You have to have a game plan, you have to execute that plan and you have to stay disciplined. Look anyone can do this, it takes time, it takes development, it takes practice and it takes the right mindset. You can do it, don’t let anyone tell you any different. In fact we hope by reading and listening to our data and information and the way we present it, that you start to develop a mindset.
One thing we can say that may help you shape your mindset, is that you have to know yourself. You have to know what drives, what motivates, what determines your actions. You need to be honest with yourself, because taking risk is not inherent to everyone, its either natural, or its something you need to CONDITION yourself for. If its not natural, you will know, you will get nervous each and every time and that is ok, that is normal. Its like anything else, the more you do it, the more you learn, the more mistakes you make, the more successes you have, each one of those events contribute to your overall personal and professional growth.
This is all part of the process and there is no way to rush it, there is no way to expedite this, you can only go through it. It may take you longer than you like or anticipate, but then again, nothing in life that is worth something, doesn’t take time and an extreme amount of effort.
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We live by this axiom that “we get out of life what we put into it”, the more people we can contribute to the better our world will be, the more connected we will all become and that is a good thing!
Ok onto other news where yesterday we highlighted Palantir earnings and the potential for either disappointment or a move above $100 which would bring max pain for the market makers, well post earnings Palantir jumped and is currently trading $104/$105 area:
We saw Palantir CEO Alex Karp on X in the investor earnings call and he had this to share, with full excitement, “Were Doing it and I am sure you are enjoying this as much as I am!” So let’s see how the day washes out today for Palantir, but investors loved the numbers, EPS saw 14 cents vs. 11 cents expected and revenue was $828 million vs. $776 million expected. They also offered a better than expected guidance forecast.
Today we have Alphabet earnings after the close, so lets take a look at the BreakEven options straddle pricing a 6.5% move as the $205 straddle is $13.45. Market makers would most likely be targeting the $195 area in our opinion. However when we look at the chart the buyers have been steady once we traded back above the 21VWMA:
Bulls can get the $210/220 call spread for about $3.50 for a 2.85x payoff and the $200/$190 put spread is about $2.60 for a 3.84x payoff. So a little bit of something for everyone here obviously calls are a bit better bid with all the buying lately.
Ok let’s take a look at yesterday’s settlements where bonds, energy and metals were all higher and equities and FX took losses:
As far as the US Bond market yesterday, we saw the long end outperform falling 4.3bp while the 2Y gained 2.7bp a nice flattening of the yield curve. Next week we will see auctions of new 10s and 30s:
When we look at the rolling changes, Silver the 5 day winner and the Euro the loser thus far:
As far as the MCA CTA Markets Sentiment Tracker, the ZF (5Y Note) moved to a -1, J6 and RB moved to neutral status:
When we look at the MEGA8s Tesla was the biggest loser followed by Apple and META was the star of the day. We will continue to target that 530 QQQ strike as the hedge, but market is a bit away from there so far:
As far as the market cap chart, you can see how important this groups value is here denoted by our uptrend line which the market cap chart has basically been using as its downside buffer. A break of this could spill into a further broader market decline, so this is something to keep an eye on:
As far as MicroStrategy which reports earnings tomorrow, the call selling strategy continues to hover at a small loss. This weeks call short for our tracker is the $360 call:
Finally we wanted to share this housing conditions chart from Bravos Research. We changed their title from People Don’t Feel Like Buying Homes, to People Can’t Afford Buying Homes:
The chart merely points out the factors of both higher mortgage rates and higher housing prices contributing to the massive drop in conditions or what we would call “affordability.” How long this can go on is a game the FOMC is willing to play, but if they were going to keep rates elevated, we just wonder why they don’t cut their balance sheet faster. If removing leverage from the system is their goal, we would think cutting the balance sheet would force a lot of leverage to be purged. Anyway this chart is an absolute eye opener.
Ok that is it for today, some of you subscribers may be receiving an email highlighting our commodity trading advisory and the launch of our Global Alternative Benchmark Program. For those interested in learning more please reach out directly or contact Nell Sloane at Capital Trading Group our Introducing Broker, her contact details are nsloane@capitaltradinggroup.com
Anyway thank you to all our subscribers and please continue to like and share our work, we greatly appreciate each and everyone of you. Till next time. Cheers.
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