Archive for the ‘Chart of the Day’ Category

New Highs For LEI(Leading Economic Indicators)

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The LEI is up 6.1% year-to-date.  A sub zero reading, which last occurred in mid 2006, is a clear recession warning sign.  We are nowhere near that type of reading.  

Hat tip Ryan Detrick

 

Halliburton Option Players Are Expecting A Rebound

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Shares of Halliburton began a steep decline in late May.  After a damaging breakdown on the 25th the stock had left behind layers of supply and was entering a fresh down leg.  One week ago HAL blew through major support near its 200 day moving average.  This key long term indicator had previously held the February, March and April lows.  The sell off continued this week pushing shares back down to the 2018 lows.  Today HAL, along with the bulk of the energy sector, managed a strong bounce but will it carry with it enough momentum to move back above the 200 day moving average?  Option traders are positioning themselves that way.  Here’s some detail from our option expert Bob von Halle:

There has been significant buy side interest in HAL Aug 50 calls all week long….perhaps in anticipation of a large move higher in oil prices post the OPEC meeting today. On Tuesday, over 20,000 contracts traded, on Wednesday over 8,000 traded, on Thursday over 7,000 traded and today 4,000 crossed the tape. The open interest in total in that strike is now over 38,000 contracts and is by far the largest in the name.

HAL closed today at $46.25 which is down $1.10 from its intra-day peak of $47.35. The August 50 calls closed at $.75 bid, down from a peak trade today of $1.05. What is interesting to note is this pull back in HAL over the course of the afternoon at the same time that WTI Oil Futures closed at the peak of the day at $69.375, up an astounding $3.85 (almost 6%)….all in reaction a more modest than expected increase in OPEC production. I trade oil futures on occasion, and my experience tells me when you see such a dramatic move in one day based on modest “news” it usually reflects substantial short covering, as way way too many people were obviously on the one side of the boat anticipating a drop in oil prices based on the potential for an increase in supply. I would not be surprised to see a significant retracement lower early next week.
Going to be watching these HAL Aug 50 calls very closely should that occur and look to establish a position on any further weakness.
At time of publication we are long HAL in some managed accounts.

Crypto

Bitcoin futures continue to take a beating.  Support is at 6K

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FANG

FANG stocks.  At or near all time highs.

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Disney Retreats, Returns to Support

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Last week shares of Disney exploded to the upside with the help of a massive wave of news driven(merger/takeover)buying.  DIS closed the week with a 4.75% gain as it extended the powerful rebound off the late May lows to 10%.  This week the stock is backing off on light trade.  At today’s low DIS is testing the top band of a very solid support zone.  This area, which runs from the March high($106.00)down to the pre-merger news high(6/12)near $104.00, should be viewed as a low risk buy zone.  We expect shares to stabilize here.  On the downside a close back below the $103.00 level would indicate a much more drawn out pullback is on the way. 

At time of publication we are long DIS in some managed accounts.

Disney’s next earnings report is due Aug. 7(Q3).

The Commodity Collapse Continues

The DBA(Invesco DB Agriculture Index ETF)is pennies from testing its all-time lows.  At current levels the index is down 58% from its all-time high(2008)and 45% from the 2014 peak.

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Top ten weightings in the DBA(%): 

Corn  13.54
Soybeans  13.42
Cocoa  13.24
Sugar  10.91
Live Cattle  10.86
Coffee  10.31
Lean Hogs  7.64
Kansas Wheat  6.62
Wheat  6.44
Feeder Cattle  3.6
Another view, longer term:
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Bloomberg’s Ag Index is at its lowest levels in history. 
Hat tip The Daily Shot

CAT

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Gold VS S&P 500 Index

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Hat tip Charlie Bilello

PFE

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GDP Estimates Continue To Rise

On June 14, the model estimate for real GDP growth in Q2 2018 is 4.8%:

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Rollbacks matter…

Hat tip Mike Valletutti, @marketmodel

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