The Fed and triple witching Friday are generally bullish events for the stock market
Although the CME has mitigated some of the impact of the triple witch with their addition of weekly expiring options, the event still influences the quarterly expirations (March, June, September, and December). The most common course of action is a short squeeze going into expiration. In this particular instance, we are referring to Friday, June 17th. The squeeze higher often extends itself into the time the June contract goes off the board, which will be at 8:30 am Friday morning. Accordingly, those wishing to get bearish this market should look for opportunities late next week.
Similarly, Fed meetings have generally enticed S&P buyers in the days before the FOMC's interest rate policy announcement. The two-day meeting begins on Tuesday, so we could see some buying early in the week.
Treasury Futures Markets
Bonds and notes are overbought, but...
Looking at the chart, one might be tempted to sell Treasury futures. However, we aren't sure that is the best idea. MRCI claims those buying the ZB (30-year bond) futures contract on June 14th, and selling it on August 28th would be profitable 87% of the time throughout the previous 15 years. In addition to positive seasonal factors; should stocks roll over as we suspect they will, Treasury prices should get a nice boost. The bottom line is: it is hard to be a bull up here, but it is harder to be a bear.
Treasury Futures Market Analysis
**Bond Futures Market Consensus:** It is heard to be a bull, but harder to be a bear.
**Technical Support:** ZB : 163'27, 161'10, and 159'19 ZN: 130'03, 128'27 and 127'13
**Technical Resistance:** ZB : 163'31 and 168'24 ZN: 131'07, and 131'20
Stock Index Futures
The ES is a raging bull...for now
Our original thoughts were that the S&P would start running out of steam somewhere around 2110 but now that we've seen the price action up here we've revised our potential reversal point to 2124.
As we've noted in previous newsletters July has been a horrible month in the stock market on the last five occasions. Accordingly, looking for some sort of pre-swoon top in June seems to be a prudent play.
We've yet to pull the trigger on any trading recommendation, but based on the current setup we'll start getting very interested in doing so near the previously noted level of 2124.
Stock Index Futures Market Ideas
**e-mini S&P Futures Market Consensus:** 2110 didn't hold, the next place should be 2124/2128ish. We'll see how things look then and consider turning bearish.
**Technical Support:** 2071, 2020, 2003, and 1960
**Technical Resistance:** 2124/28, and 2144
e-mini S&P Futures Day Trading Ideas
**These are counter-trend entry ideas, the more distant the level the more reliable but the less likely to get filled**
ES Day Trade Sell Levels: 2118 and 2127
ES Day Trade Buy Levels: 2105 (minor), 2091, and 2082
In other commodity futures and options markets....
Clients were recommended to be long July corn from the equivalent of about $2.80 (minis or full sized).
June 7- Clients were advised to take profits on their long corn futures near $4.27.
(Our clients receive short option trading ideas in other markets such as gold, crude oil, corn, soybeans, Euro, Yen, and more. Email us for more information)
Carley GarnerDeCarley Trading (a division of Zaner)
www.HigherProbabilityCommodityTradingBook.com **There is substantial risk of loss in trading futures and options.** These recommendations are a solicitation for entering into derivatives transactions. All known news and events have already been factored into the price of the underlying derivatives discussed. From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Seasonal tendencies are a composite of some of the more consistent commodity futures seasonals that have occurred over the past 15 or more years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year. While seasonal trends may potentially impact supply and demand in certain commodities, seasonal aspects of supply and demand have been factored into futures & options market pricing. Even if a seasonal tendency occurs in the future, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the future, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.
Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data.