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Market Updates

Stock futures higher

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Stock futures are green this morning and should have stocks marginally higher at the open of trading. Currently we're seeing S&P futures (SP01U) higher by 3.5 points, NASDAQ futures (ND01U) are up 10.5 points and Dow futures (DJ01U) are bid 14 points higher. Fair value for the S&P 500 for today is $6.62. That price will not change during the day. Institutional buy programs are set for buying at $8.11 and set for programs selling at $4.93. If traders using Q-charts would like to watch these program trading premium execution levels, the symbol is $PREM. Fair Value for the NASDAQ-100 today is $14.98.

Bond YIELDS lower

Bond YIELDS are fractionally lower this morning on the three major maturities we follow on a daily basis. In Friday's PremierInvestor.com market wrap, we identified what we feel is a critical level for the 30-year YIELD to get above at the 5.8% level for stocks to truly find a turning point. This morning, the YIELD for the 30-year (TYX.X) had dropped to the 5.71% level, but support for YIELD (resistance for price) looks to be firming at the 5.56% level.

Another bond that I'm starting to monitor is the 13-week Treasury Bill Index (IRX.X). This bond is much shorter-term in maturity than the 5-year (FVX.X) and more closely resembles the MARKETS perception on what it feels the Fed will be doing in upcoming meetings. On June 28th, this bond did see some selling, but compared to the other three bonds we're following, we have seen money flow into this bond at a steady rate. This makes sense as a fund manager can dump cash into this bond, tie that money up for just 13-weeks (or less depending on when money was invested as it relates to maturity) and be relatively sure he/she will get a YIELD on their money somewhere in the ballpark of 3.5%. Then, depending on market events their view of the economy and potential impact on stocks, they can either roll the money into stocks at that time or stick with bonds. So far it looks like money has been sticking around the bond market and stocks have suffered the consequences. Eventually this will change and we're keeping an eye on things closely here. More active traders would be well served to do the same.

Jeff Bailey
Senior Market Technician

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