Good Morning Traders and Investors and thank you for joining me for another edition of the Magnelibra Markets Podcast, I’m your host Mike Agne and today’s episode #33 is entitled “Truly a Historic Day Today, Equities ramp ARM Soars, but Tucker C and VPutin are the focus”
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.
Welcome guys and it will be a truly historic day today, not because of any market based moves or FOMC surprises, and no not because of the new 30Yr auction at noon today. Rather, we are talking about the historic interview between Tucker Carlson and Vladimir Putin.
No matter what your political affiliation is, no matter what you feel about either of these two, here at Magnelibra, we are pro free speech and believe in independent media and journalism to bring us an unbiased news and fact based approach. Yes what either may say may not be agreed by many, but that is the point, bring the many the opportunity to decide for themselves what they think. When it comes to war, the specter of war, genocide, human lives are at stake and it is up to all of us to intervene in a way that promotes open communications, that promotes a dialogue where the goal is to mediate for peace. We prefer peaceful resolutions over war and destruction every day of the week and you should too.
It was another breakout to the upside for Wall Street yesterday and when Disney’s higher off of earnings well we know euphoria is here! Speaking of Disney, yes cost cutting is helping but what really drove the stock higher post earnings was the announced $3Bn in buybacks and a 50% increase in their dividend for record holders as of July 8th 2024. All in all the Nasdaq futures were the standout +181.75 closing at 17841.75. When we look at the Nasdaq futures we can see the base trendlines built off of the prior lows continue to gain steepness indicating an acceleration of bids chasing shallow down ticks. This chart, a daily time frame exhibits that with our red base trend lines:
So for now the bulls are still in control. To keep things into perspective we have a lot of alpha chasing going on and why not, the FOMC paints a patient wait and see picture and the BLS states jobs are plentiful and the economy is growing. That is the narrative so that is all focusing on the positive. We keep hearing this market is not supported by the breadth indicator, or the fact that just a few names are carrying the weight. However as Magnelibra has stated time and time again, AI mechanical algo’s do not care about the broader economy, they operate on granularity and laser focus and that means targeting a few names and throwing all the pennies at it both on the long side and the short. This is our new market, well its not new, its been this way for quite some time, its just morphing into a more coiled tighter race between the big players.
Alright there really isn’t much of a change to the overall stance, seasonals aren’t taking hold on the equities just yet, but we still have till the beginning of March for this and honestly, yes the Nasdaq is above 17600 and the SP500 futures are now above 5000, so the real test is on our weeklies, can we stay and close above these levels or will we get a move back below?
March Crude continues to bounce and is a go with as long as that $72 level continues to hold and we pointed that out when we were down there, so savvy players could have easily gone long and then set stops right below for a decent risk reward profile, the target upside for March Crude here is now $76.25 where we would suspect the first initial sellers to show up:
Alright we wanted to also point out that Berkshire is pushing up to some technically important areas. We like to watch this stock as a proxy for large player sentiment and we believe the current trend channel is very telling overall. Here is the daily take a look at the channel this thing has been in. Above $400 seems to have limited upside technically and we will watch Berkshire here to see if it starts to post some individual down days indicating larger based players selling:
Yesterday our podcast talked about ARM and its earnings and the options indicating a 10% move, well ARM was well bid after earnings up 61% trading above $125. Ton of call buyers were well rewarded:
We aren’t really surprised this is an AI driver, its part of the Nvidia posse and as we said SoftBank owns this thing, so the narrative was already set.
Ok so for today we have that 30Y auction, the 10Y auction yesterday went well a 1.2bp stop thru and all that means is that the auction was well bid as the auction rate at the time was 1.2bp lower than where the noon mark was prior to the auction so this higher demand drove the yields lower. As a prop trader we bid the auction all the time, they were really the highlights of the month and the art of it was in the hedging of the futures these were a real treat to participate in. You hoped for a stop thru like this because you would get the rest of your hedges off at much higher bond prices, locking in some massive profits and being in a basis position sometimes at half a point winners! Those were the days! Now the SEC wants to make every participant regulated like a large hedge fund, not exactly what you want to do and limit participants if you want a smooth functioning market place, but they have their reasons I guess. Anyway we have the 30Y today and this one should be well bid as well, but will see in a bit.
After the close we have Affirm Holdings (AFRM), the buy now pay it later group which should see decent movement as the ATM B/E for the options based off the $47 straddle is trading $8 which is a hefty 17% move. Seems like the skew is to the call side, but if the outlook by the company has any concern on defaults by consumers, we would expect the stock to get hit and if you look at the $43/$38 put spread its around $1.45 for a near 3 to 1 total payoff. So keep an eye on Affirm this afternoon.
Ok let’s look at the Settlements page for yesterday:
As far as the Futures Model Tracker which continues with no changes, a close above 17600 on the week will flip out of that short Nasdaq and a close above 5000 in the SP500 will force additional longs added there:
As far as the MEGA8s they were well bid led by META +3.27%:
The MEGA8s market cap sits right below $14 Trillion now:
That is all for today guys, keep an eye out for the Tucker Carlson interview with Vladimir Putin its scheduled for 6pm Est. It will be a historic interview and one to put main stream media on fire!
Alright we thank you for listening and as always please give a like and or share our work if you can and absolutely if you haven’t already think about hitting that subscribe button. Our goal is simple, to make Magnelibra listeners the most informed, well educated and financially savvy individuals out there, You owe it to yourself, so sign up and spread the word! Till next time, cheers.
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