Thank you guys for joining me and welcome to Episode 13 of Season 2 brought to you by Magnelibra Trading & Research (MTR). This episode is entitled “Trump-Putin Summit & Equity Bulls Trying to Reassert Control”
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.
Ok based on a recent phone call with Russia and given the recent comments from the Kremlin’s spokesperson Dmitry Peskov, it appears the ground work for a summit between the United States and Russia is set. We also thought it was interesting that Peskov had this to say via RT News,
We are much more impressed by the position of the current administration, and we are open to dialogue.
He also had this to say,
Unlike the administration of ex-US President Joe Biden, which believed that everything must be done to ensure that the war continues, the Trump team apparently holds the view that everything must be done to stop the war and for peace to prevail." Dmitry Peskov 2/12/25
Whether or not this is true, Peskov went on to say,
Against the backdrop of what has been happening for several years, there have been no contacts at the highest level between Moscow and Washington.”
So here at Magnelibra we put diplomacy above all other eventualities and the fact that the Russian spokesperson is saying that about communications over the last few years, should trouble many. This has nothing to do with picking sides, but rather realizing that if that statement is true, than the prior administration didn’t do their job and try to protect innocent lives from being loss, as we always view any kind of war and bloodshed as the absolute last resort option. So we are certainly glad and excited for the two superpowers to get back at the negotiating table and put an end to this special military operation.
Ok continuing on here today we had a look at the PPI numbers and following yesterday’s CPI, PPI came in at 0.4% a tenth higher than expected MoM. Decembers print was also revised 3/10s higher to 0.5%, with PPI rising 3.5% YoY -ZeroHedge:
Ok after the close today, we have Coinbase (COIN) and Palo Alto Networks. First let’s look at Coinbase, it has been stuck at its fib retrace of $296 for quite some time. Usually we look at this Fib 0.786 at as a reversal level and the fact it has been rejected a few times means sellers are here. Now earnings can change all of this, but it can also confirm the sellers bias here. So let’s look at the chart first:
Now let’s take a look at the options for tomorrow expiry to get some bias and see how much the breakeven is for the ATM Straddle. The $295 Straddle is going for $25.90 so this implies a decent move of 8.7% on the equity today. When we look at the open interest in the options there is hefty call interest from $300 to $312.50 and we don’t really see many puts of note except on the $280 and $270 strikes even that is marginal at best. So a lot of upside expectation here on this one. I would suspect the Market Makers want to see a move below $290 and a close of the stock on this Friday more near $283 or so, if bearish you can look at the $295/$280 put spread for about $6.70 and a risk/reward profile of 2.23x at full value. This one may pop and finally breakout, but the Fib 0.786, the options bias and the consolidation recently here should make this one interesting to watch. A breakout higher would finally push Coinbase to new highs, a failure here at this level could see sellers confirmed and lead to more downside pressure.
As far as Palo Alto Networks (PANW) its up about 20% off its lows last month:
Once again, the tilt here is on the calls and the upside with decent interest from $195 on up. The breakeven ATM Straddle is trading at $16.35 which indicates an 8.2% move. Given the recent set up and call interest, we like to take the contrarian view and market makers as well probably want to see this one near $183/$185 area by tomorrows close, so the $195/$185 put spread is $3.75 for a risk/reward profile of 2.67x better than the Coinbase payoff at full value.
Ok hope that insight helps you more active trader. As far as the markets today, the SP500 looks strong coming up to last Friday’s sell off point however:
So a nice retrace of yesterday’s losses and now almost all of last Friday’s down move. The bulls have pushed it up past 6100 and now target 6120 in the March Futures, however we suspect sellers will test this 6110/6120 area once again but above 6120 would stop all of them out most likely. As far as the Nasdaq futures with 21608 supported by renewed buyers this week 22115 becomes the next level to test for the bulls:
Ok let’s take a look at yesterday’s settles and rolling changes:
Copper is now the big star on the 30 day board with Crude the big loser over that same time frame!
Here is the Copper Futures chart, look at that run!! the 5.20 area is the target now:
As far as yesterday’s bond market moves the 5Y sector was the biggest loser as yields jumped and the curve flattened:
Today we have a new 30Y bond auction and post the PPI the bond market yields have fallen about 12bp in the 10Y sector dropping from 4.66% to currently 4.54%:
Ok onto the MCA CTA Markets Sentiment a lot of moves back to neutral:
As far as the MEGA8s a pretty quiet day in the complex and as of this morning the MEGA8s Tracker does have on the QQQ 533C at $3.00 as the hedge for this week:
As we look at the MEGA8s market cap chart this is an important nexus for the group, they need to reassert the upside or risk failure here:
As far as the StrategyB data it is still underwater for the call selling strategy:
We are also continuing to monitor Bitcoin as it is stuck under the “Iron Dome” and below $97k risks a move to $87k:
Ok guys that is it for now, good luck today and we hope you learned something new, our goal is simple, to keep our readers and listeners well informed as to the things we believe matter in today’s trading world. There is a lot of garbage and noise, a lot of narrative and conjecture. We try to cut through all that to bring you fair and impartial and unbiased approaches to enable your mind to think freely. As long time traders we understand truly how difficult it is and it takes years to develop good skills and habits, we thank you for letting us be a part of that process. As always please subscribe, like and share if you can, we greatly appreciate it. Till next time. Cheers.
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