Skip to content Skip to footer

Market Rundown: A Brief Look Behind and the Week Ahead

The main theme of the week is the same as of late, and that is trading individual plays around a range-bound market.

I feel like I have written this before and went back to the “archives” to see what I wrote the last time the jobs # came out to see where we were on the market indices at the time and I would’ve attached the last article but there are too may obsolete quotes and data but the main theme is the same and that is trading individual plays around a range-bound market.

There are some differences but the main one this time is that despite the S&P ($SPX) trading near all-time highs, the Russell ($IWM) and the Transports ($IYT) are well off year highs and in some cases down over 5% of y/h’s.

Over the past week, with a slew of earnings that came out, traders played the normal plays (more later) as economists, etc. waited for the Friday jobs # to most likely determine the direction of rates in the near-term leaving many to question if the Fed will raise rates sooner than later and as always, “we will leave that to the pros.” I will say that the good news is that we aren’t breaking down but the bad news is that we aren’t breaking out.

Overseas markets continue to give the US markets some early S&P future direction with the Shanghai Composite having wild swings, the Elections in Europe which took the FTSE up over 2% on Friday, and Greece now down 3% early Monday morning so now more than ever our traders watch to see how the European markets close in the late am to get a better indication of overseas sentiment and how they set up for the US close and the open of trading the next day. We aren’t complaining and applaud the volatility.

I would like to make a point that will make more sense in my conclusion. At Tradeview Markets, our traders have the option of course but rarely trade any Index Futures (notably S&P/Nasdaq) and most commonly the SPY’s (ETF) and that’s for many reasons but mostly because of a story that I tell from time to time, and not to be dramatic, changed the way I thought about trading market indices from that point on. At my previous firm, when the industry downsizing was in full force, we consolidated offices/traders, etc so that only the best at the firm remained. I sat on a desk, next to, a trader that literally and consistently had the highest win % in the firm…and needless to say, I did NOT.

All this trader did, named Steve, was the look and stare at his Bloomberg terminal for ANY material news that hit the wires. That was his gig and his style and I respected that. Not the sexiest way or most exciting way to trade but we were friends and I knew his financials as to what he made in his career trading so I had no reason to question so, as usual, I put my ego aside and tried to learn.

So one day, I forget what happened but it was rare (think a rate CUT actually) and the market moved violently in one direction, like a 40 handle S&P move. Stocks are gapping up with wide indications and I was going NUTS, typing in orders but essentially throwing darts to see if “anything stuck” and would think later after my fills hit. Win or lose just a great trading opportunity.   Steve is to my right and still staring at the Bloomberg terminal in the usual position so I look over and say, “Steve, throw something on man…short 100 SPY to get in-game.”   So he looked at me and said, ‘Mikey, I don’t gamble’. OK….

After the close, we were talking and was actually teasing Steve about the discipline. This is where it made sense and I will not cheapen the lesson but have to paraphrase. Steve said that if the futures run up 40 handles and he shorts an index, say 100 SPY, he believes that it is a GAMBLE, a 50/50 proposition, despite where the futures have come from. Sure the probabilities are greater for a pullback the higher “they” go and like anything in this profession, it’s all about timing. But he compared it to flipping a coin. You watch someone flip a coin 10X in a row and it comes up tails all 10x, much like a massive futures rally. If you “bet” or put on a trade thinking that heads are due to come up, you are wrong, it’s still a 50/50 bet if you decide to take that wager, so it’s a gamble and therefore, have no edge.

The point here is supposed AAPL, which was weak on the day, acts poorly into a futures move…short AAPL. You have a gauge and something to go by that reflects how something acts and not just a probability of picking a direction of the market(s).   Just an opinion and from where I come from, most traders, and a SHARP one, lose money on market direction anyway. You can’t time the market ….

Where does this leave us at the beginning of trading for the week of May 11?

No opinion….if you are reading this article, chances you are well versed and hopefully in tune and focused on the main topics but one predominant one is watching the SPX thru 2120.

In the meantime, the market is giving GREAT opportunities in individual names. There have been dozens of stocks with 5-10% ranges that have had material news, good price action, and volume.
Earning stocks in play and looking for resumption trades: CYBR MNST PCLN BABA TSLA GMCR WFM NUS NFLX TWTR SAVE LNKD

Stocks active with great range and volume: HLF LL PBTI GEVO TASR ICLD SUNE MSFT

Stocks prone to news: ALTR CRM YELP FXI (ETF)

George Soros

MICHAEL VENEZIA
Trader
mvenezia@rhino-report.tradeviewforex.com

follow me on Twitter

Tradeview Ltd. is not a portfolio manager or an investment advisor. This Market Report is for informational purposes only. Any statements made or opinions voiced in this Market Report do not constitute investment advice. The Tradeview Ltd. Market Report does not constitute a solicitation to buy or sell in the financial markets. Although the information contained in the Market Report comes from trusted sources, Tradeview Ltd. is not responsible for guaranteeing the accuracy, timeliness, completeness, or fitness of such sources. Tradeview Ltd. shall not be responsible for and disclaims all liability for any losses which may be suffered from access and use of the contents of the Tradeview Ltd. Market Report. Trading any financial instrument on margin, using leverage or otherwise involves considerable risk. Therefore, before deciding to participate in any style of trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Consulting with your investment counselor, attorney, accountant or other professional upon whom you rely for guidance as to the appropriateness of an investment in any style of trading is recommended.

Tradeview Ltd.

Is licensed to carry on securities investment business and is regulated by the Cayman Islands Monetary Authority (CIMA) as a full securities broker-dealer. Tradeview conducts business pursuant to the Cayman Islands Securities Investment Business Law (SIBL) and its activities fall under the direct supervision of the Investments and Securities Division of CIMA.
Headquarters: 5th Floor Anderson Square, 64 Shedden Road, Georgetown, Grand Cayman, Cayman Islands KY1-1002, BWI.
Website: www.tradeviewforex.com

Tradeview Asia Ltd.

Is licensed and regulated by the Labuan Financial Services Authority (FSA) as a Money Broker, registration number LL15870 licensed to facilitate transactions in foreign exchange pursuant to Labuan Financial Services and Securities Act 2010, the Labuan Companies Act 1990 and the Labuan Business Activity Tax Act 1990.
Headquarters: International Business Financial Centre at Office 5, Jamie Business Center I, Unit F10, First Floor, Paragon Labuan, Jalan Mustapha, 87000 Labuan F.T.
Website: www.tvmgloballtd.com

Tradeview Europe Ltd.

Is licensed as a Category 2 Investment Service Company and is regulated by the Malta Financial Services Authority (MFSA). The Malta Financial Services Authority (MFSA) is the single regulator for financial services in Malta. MFSA is a fully autonomous public institution and reports to Parliament on an annual basis. The MFSA is a member of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the International Organization of Securities Commissions (IOSCO) and is a signatory of the Multilateral Memorandum of Understanding with other European regulatory Institutions. Tradeview is authorized to provide financial services across multiple asset classes and is passported in the EU/EEA under MiFID II (EU Markets in Financial Instruments Directive).
Headquarters: 157 Archbishops Street, Valletta VLT Malta 1440.
Website: www.tradeview.eu

Tradeview Financial Markets S.A.C Global

Is authorized to conduct business pursuant to and in compliance with the General Law of Companies (LGS) promulgated by the government of Peru. Tradeview Financial Markets S.A.C is registered with the National Superintendence of Public Registries (SUNARP), company number 13089531. Tradeview Financial Markets S.A.C provides financial services in selected OTC derivative markets in compliance with all applicable government regulations.
Headquarters: Los Mirtos 239 Urb. San Eugenio, Lince, Lima, Perú.
Website: www.tradeviewlatam.com