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Stock futures post gains

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Equity traders here in the U.S. are looking at a higher open for stocks this morning as S&P futures (sp02u) trade higher by 13.8 points at 874.80, NASDAQ futures (nd02u) gain 26 points to 932 and Dow futures (dj02u) trade higher by 115 points at 8,400.

Fair value for the S&P 500 today is $0.66. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.16 and set for program selling at $-1.82. Fair value for the NASDAQ-100 today is $2.36.

HL Camp is saying that buy programs accounted for 135 points of yesterday's rally. The premium execution level for buy programs Tuesday was $1.72 (today's buy program premium is $2.16) and buy triggers were hit at 09:04, 09:06, 09:12, 09:13, 09:17, 09:18, 09:32, 09:33, 10:20, 10:25 and 10:26 Central Daylight Time. Stocks that were bought the most during buy programs executed by the program trading firms on Tuesday were AMGN, ETR, MMM, MO and USB.

Sell programs accounted for 125 points of Tuesday afternoon's last hour drop. The premium execution level for programs Tuesday was $-1.84 (today's sell program premium is $-1.82). The sell trigger was hit at 02:34, 02:41, 2:42, 02:43, 02:47, 02:48 and 02:54. Program selling dropped the Dow Industrials down from 8377 at 02:34 to 8,251 at 02:55, a decline of over 125 points. Stocks that were sold the most during sell programs executed by program trading firms on Tuesday were G, HCA, KO, LTD, MCD and PEP.

For q-charts users, the symbol for "premium" is $PREM. What a trader can do is each day, set their upside and downside alerts on their q-charts for this symbol at the specified premium levels each morning. Then when triggered (up or down) the trader will be alert to a buy/sell program coming into the markets.

Bonds are rather mixed this morning. The very short-term 13-week Treasury YIELD ($IRX.X) 1.590% is seeing some strong buying as YIELD drops from yesterday's closing 1.612%. The 5-year Treasury is seeing fractional selling as YIELD ($FVX.X) 3.308% rises modestly from yesterday's closing YIELD of 3.303%. Earlier this morning, this YIELD was higher at 3.346, which had me thinking that the S&P 500 Index (SPX.X) was going to rocket higher today with a 4% gain, but the early action in the bond market has me now looking at a higher open for stocks, and perhaps a bit of a pullback from the higher open.

Keep a close eye on your bond YIELDS this morning. As we look longer out, both the 10-year ($TNX.X) and 30-year ($TYX.X) YIELDS are lower, signaling some buying in the higher YIELDING instruments. This type of action may have some higher dividend paying utilities seeing gains today. One security that a shorter-term trader will trade under such circumstances are the Utilities HOLDRS (AMEX:UTH) $68.60, which looks to have some near-term upside to the declining 50-day MA of $75. Near-term resistance is the July 16th relative high of $71.65. Bullish trader could look long 1/4 position at the open, stop $66.10, then round to 1/2 position on break above $71.65 with near-term target of the 50-day MA. Should bullishness build in the coming week (5-sessions) further upside to the $80.00 level could be recognized.

Jeff Bailey
Senior Market Technician
Option Investor


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