What Futures Traders Should Watch This Week
By John Thorpe, Senior Broker
Veterans Day is Wednesday Nov. 11th
All markets will have normal hours, Some banks, govt offices and credit unions may be closed. The weekly Crude Stocks report moves to Thursday @ Noon CST and the Nat Gas report moves to 10:30 am Friday.
VIX
The CBOE Volatility Index, or VIX, measures expected 30-day volatility for the S&P 500. It rose to 28.36 on Nov. 5th, marking a sharp change in market risk sentiment after recent concerns over inflation, interest rates, energy prices, and crowded AI-related trades.
Post Election Results
The Post election results were not kindly met by the traders as a sharp sell-off occurred due to two factors, one publicly acknowledged, according to traders and other industry experts, is the political wind change resulting from the Mid-term elections. Expected growth in the data center buildout will be reduced significantly by adding more regulation to the approval processes. Water, Power, land use, taxation are some of the areas experts see increased regulation.
China/Taiwan
The other factor, not so publicly acknowledged, is on Nov. 4th while the U.S. is inward looking post-election, China had, according the South China Morning Post sent 49 sorties of PLA aircraft in a 24-hour period around the Island of Taiwan.
Additionally, the head of Taiwan’s National Security Council Joseph Wu, reported over 100 People’s Liberation Army naval vessels and Chinese Coastguard vessels were actively conducting drills around the nation Island. If you recall, Beijing sees Taiwan as part of China to be reunited by force if necessary.
· According to the Global Taiwan Institute, Taiwan manufactures over 60% of the world’s semiconductor output and more than 90 % of the worlds most advanced microchips. If China were to take Taiwan by force, what would happen to the supply of chips and semiconductors? And the impact on the US Stock market could be devastating given roughly 40% of the S&P 500 weighted average is represented by tech.
· Apple Inc. (AAPL): ~7.39%
· Nvidia Corp (NVDA): ~6.80%
· Microsoft Corp (MSFT): ~5.85%
· Amazon.com Inc (AMZN): ~4.15%
· Alphabet Inc. (GOOGL/GOOG): ~5.19% combined
· Meta Platforms, Inc. (META): ~2.31%
· Broadcom Inc. (AVGO): ~2.16%
· Tesla, Inc. (TSLA):
Earnings moves to midcaps with the exception of Cisco and Applied Materials Thursday and plenty of economic data to stir the drink Including CPI, PPI and WASDE in the Agricultural sector. 16 Fed Speakers will either entertain or antagonize the markets. check the calendar below for names and times.
Back to the VIX I posted the past few weeks and is worth repeating.
(you can trade the VIX futures with CannonTrading)
18–20
First warning zone
A break above the recent 18 area, followed by 20, would suggest increasing demand for downside protection.
22–25
Correction-stress zone
A sustained move into this range, particularly with the S&P 500 making lower lows, would signal a more meaningful deterioration in risk appetite.
30+
High-stress regime
A move above 30 would indicate substantial volatility expectations. Watch for widening credit spreads, weaker market breadth and forced selling.
The energy’s, metals, securities, grains and interest rates are swirling in the uncertainty from a lack of resolution in the attempted unwinding of the Iranian nuclear program.
Don’t let your guard down just yet, the fog continues, tune into the Sunday evening markets to witness reactions to the weekend news streams, manufactured or true.
Plan your trade and trade your plan!
Earnings Next Week:
· Mon. KKR, Constellation Energy Occidental Petroleum
· Tue. TransDigm, CoreWeave
· Wed. Corteva, TetraTech
· Thu. Cisco, Applied Materials
· Fri. Quiet
Fed Speakers: (all times CDT)
· Mon. Goolsbee 10:00 am, Barkin 12:15 pm, Bowman 12:15 pm, Goolsbee 3:00 pm
· Tues. Logan 9:35 am, Bowman 1:30 pm, Schmid 1:30 pm, Bowman 6:30 pm
· Wed. Quiet
· Thu. Hammack 9:00 am, Barr 10:00 am, Goolsbee 11:30 am, Daly 1:10 pm. Williams 6:30 pm
· Fri. Bowman 10:50 am, Daly Noon, Jefferson 7:00pm
Econ Data:
· Mon. CB Trends, Wholesale inventories, Cons Inf. Expectations, 3-6 mo. T-Bill auction, 2 yr note auction
· Tue. NFIB Optimism index, ADP weekly, CPI, 6-week Bill auction, Redbook, API Crude stock change WASDE 11:00am
· Wed. MBA Mortgage applications,
· Thu. Initial Jobless Claims, Existing Home Sales, EIA Crude Stocks, 4-, 8- and 17-week bill auction, Fed Balance sheet, 30yr Bond auction
· Fri. PPI, EIA Nat Gas Stocks Baker Hughes Oil Rig Count. |
