Good morning!
Another huge pre-market rally but we're up because Asia and Europe are up on the relief that we were up yesterday and now it's a bit overdone.
The day charts are almost comical at this point:
Still, we have to respect the rally so we'll only be shorting of we get confirmed crosses under 3 of 5 of the following: /YM 18,650, /ES 2,175, /NQ 4,850, /TF 1,240, /NKD 17,500. EuroStoxx should be rejected at 3,100 but, if not, then how can we short? DAX also should be rejected at 10,800 and we'll know by lunch and VIX needs to hold 14.
This is all happening with Dollar at 99 so it's a strong rally that can get another leg up simply from the Dollar going down:
Oil and gasoline inching back, /NG still finding a floor:
/LB is Lumber and that's the new long bet above the 300 line. The way it trades is you are buying contracts for 110,000 feet of random-length (8-20 feet), building grade 2x4s. Simple premise - Trump is a builder - at some point he's going to talk about stimulating the construction industry. Every 0.10 is $11 per contract on /LB.
PS - If you did not take profits from yesterday's index longs, congratulations but shame on you if you are still being greedy!
CTT is a lumber REIT that pays a 5% dividends (0.54) at $11.05 and you can buy the stock and sell the May $11 calls for $1.50 or better and that drops the basis to $9.55 and you don't even need to sell the puts - it's a really nice covered call on a great long-term dividend payer.
