Will Winters Grip Affect the Markets

Magnelibra Trading & Research

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Will Winters Grip Affect the Markets

Mike Agne

Jan 06, 2025

Transcript

Welcome to the 68th episode (Episode 1 Season 2 start of 2025) from Magnelibra Trading & Research, entitled “Will Winters Grip Affect the Markets”

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.

Temperatures set to plunge across most of the U.S. this weeks as a fresh round of Polar Vortex winter winds set in. Most of the U.S. will see temperatures dip well into the the 20s and in some areas below zero. Even Florida isn’t immune as low temps should hit the below freezing marks in Northern Florida. Take a look a the forecast for Wednesday night/Thursday morning low temps from NOAA:

Let’s jump into this weeks calendar, which is highlighted by ISM Services on Tuesday, Fed Minutes on Wednesday and Non Farm Payrolls on Friday.

We know that the equity markets saw some decent profit taking at the end of the year and are now poised to be tested for the first time this week with some real data. Let’s take a look first at the SP500 and Nasdaq March futures. We can see that the SP500 futures are below our bull line at 6042.50 and thus we would suspect sellers to sell these up moves toward this level and buyers to defend the 5840 area and obviously below 5725 would be our longer term top indicator area:

As far as the Nasdaq futures they are sitting right near our pivot area of 21608. You can see we have waffled around these levels for the last month. NQ can maintain a bullish case above this level but below 20496 we suspect a longer term top would be in place:

So keep an eye on these levels this week for more directional confirmation, but for now let’s absorb the data as it comes in. If you are still fully long then use the downside target levels as exits for that sentiment and maintain your bullish stance as long as we are above these levels. Nobody ever thinks equity markets can go down and why would anyone? The last 2 years have been straight up and smack in the face of rising interest rates!

Speaking of interest rates, let’s take a peek at the US Govt 10Yr. This week will be pivotal, I would suspect a test of the 4.371% and see how the markets react there. For now the bears are in control and higher rates are the dominant theme for now. So watch that 4.371% level in 10s, a weekly close below here would be necessary to change the current month long rise in rates:

Moving over to the FX land and noting the US Dollar strength the Euro Future looks ready to tumble below Par and only a close back above 110-28 in the March futures would charge our sentiment there. This means the US Dollar strength has some staying power for now:

Let’s now move over to Gold where the Feb contract has the 2678 level as its bull/bear line for us and its interesting to see the convergence of the 21wkVWMA at 2647.5 as the magnet here. We like Gold in the long run, but this area does not offer a great long term location from our purview:

One other chart we want you guys to look at is the SP500/NQ futures contracts 1:1 spread. We love this chart and the trend has obviously favored the Nasdaq and the bull move in equities over the last 2 years. This is a spread we are looking to revert so this is one to keep an eye on:

Ok so let’s move over to the Settlement Tracker with last weeks closes, as far as the daily winners, the Nasdaq was the standout with Nat Gas the big loser:

Here are the 5 day and 30 day net change winners and losers:

Next up we have the MCA Futures Model Tracker. A couple of notable changes in this tracker is that we removed a few of the markets that we felt are not necessary components to this overall sentiment tracker. Secondly we added the data of changes in regards to sentiments +1/-1/ or 0. For instance Copper moved to a long so for Monday’s data we will include it as a +1 for the program. You can also see the daily P+L and we track the monthly in the right hand column.

Ok next up we have the MEGA8s tracker where Tesla led the way last Friday. As far as this weeks hedge we will probably wait till we get a decent up move on the week and target the QQQ 530 area to set Call sales, we may even use the SPY, so we will list the one that we are targeting as always for our subscribers:

As far as the QQQ we can see that the 511 area was defended very well last week and it remains our bull/bear pivot so that is the area to watch this week, we would suspect sellers on approach of 531 area:

Ok let’s now look at the MicroStrategy Tracker. As far as this strategy we did have to use the $522.50 strike price as the settle price for our shares on Friday, so for those keeping track of this, if your wondering whey the MSTR Equity portion is down that much that is why. When you are long the underlying stock and short calls against it, you are liquidated should your stock trade above the short strike price. So we are trying to be as accurate as possible with quantifying this strategy:

As far as this week with MSTR settling near $340 we will see where the equity opens tomorrow and set the call strike appropriately for our tracker we are looking at the 1/10 expiry $365 Call which is trading 6.85 as of the close on Friday, so we will see where MSTR opens and go from there:

We hope you are following all of our trackers and watching alongside us as we make our journey through this financial landscape. We know some of the things we talk about are sometimes complicated, but we hope that the way we convey things you guys can learn a thing or two. Trading and investing is complicated, but they are not something that we can’t decipher through breaking things down and of the course of due time. The more you put in, the more you will get out.

Some of the other things that are on our mind is the ongoing Administration hand over and the potential volatility from that, the ongoing tragic events like what happened in New Orleans and in Las Vegas, the transition of the FOMC and their rate cutting campaign. There are a lot of things that have the potential to cause some real volatility. We hope that you stay the course with us and some of the other items we have been researching are ones that we know you will definitely hear about in the near future. We know Bitcoin has been all the talk, but honestly we feel there are other decentralized markets out there that have a superior way of transacting. One that we think you will start to hear more and more about is Monero. We know it is the standout among crypto currency security and anonymity and one that most governments are trying to abolish. With that alone we can tell that its superiority is validated and one of the companies trying to accommodate all of this is CakeWallet. We aren’t advocating any of these things, rather we are just drawing them to your attention because we feel the future as uncertain as it is, presents us with many opportunities to uncover, so when you hear these names, you won’t be as surprised. Anyway start doing your digging, keep your eyes and ears open and always be ready for the next opportunity!

Till next time, please like, share and if you can subscribe! For those that want to support our work anonymously in Bitcoin please donate to this address:

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