As a Lehman summer associate many moons ago, I split my ten weeks primarily between two desks – High Grade Corporates and Equity Program Trading.  The assignment coordinating gods smiled upon me as both groups were crown jewels at the bank, run by top shelf management with impeccable reputations and unmatched ability.  As part of the program, I did get to sample a few of the different areas on the Floor as we plebes needed as many people as possible to go to bat for us to secure the ultimate prize of a full time offer for the following September. 

One morning when I found myself on the Govie Desk, the Durable Goods numbers flashed across the Bloomberg of the trader I was sitting next to.  The headline ripped consensus which instantly sat on the Treasury market.  The economist for the firm who was unabashedly Continue reading »

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Since I began writing this commentary over five years ago, I have listed key technical benchmarks for the S&P 500 E-Minis after the main body of the note.  Although it attracts the least amount of attention, I share these key support and resistance points as an additional tool to reduce slippage for execution traders.  I never will judge the value of the content I provide from the written text as I leave that to those who choose to take the time to read it; however, I will put these index levels up against anyone else’s in terms of quality.  In fact, paper trading a futures intraday model against these metrics has produced consistent returns in the high-teens with only modest drawdowns.

The secret in identifying support and resistance Continue reading »

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Extending yesterday’s baseball analogy, the market hit one deep into the gap on Thursday.  Before other bulls start doing cartwheels, let me remind them that a double does not score any runs with no one on base and over the past three weeks the bears have outscored us 12-3.  I certainly can run through paragraphs of analysis on the milestones the TICK data reached yesterday, but I ask that you take it on faith that the information suggests investors put money to work aggressively.  Instead, I want to focus more on the psychology of this promising bounce off the bottom in an effort to determine if stocks can extend this move.

Given the extremely elevated volatility and uncertain macro environment, the large long only institutions will Continue reading »

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