Nasdaq 100 Leads Rebound as Tesla Rallies After Earnings

Nasdaq 100 Leads Rebound as Tesla Rallies After Earnings

Also 10-year T-bond, silver, crude oil and Japanese yen futures

Nasdaq, 10-year T-bond, silver, crude oil, Japanese yen futures
  1. Nasdaq 100 E-mini futures (/NQ): +0.54% 

  2. 10-year T-note futures (/ZN): -0.27% 

  3. Gold futures (/GC): -0.18% 

  4. Natural gas futures (/NG): -3.37% 

  5. Canadian dollar futures (/6C): -0.43% 


Tesla
(TSLA) earnings may have been disappointing, but the announcement of a new mass-produced low-cost vehicle is the center of attention and enough of a reason for a better tone in markets this morning.

Even with Meta Platforms (META) earnings looming after hours, the Nasdaq 100 is the clear leader out of the gate. A better than expected March U.S. durable goods orders report may be helping to keep bond yields elevated and the U.S. dollar pointed higher against its counterparts. 

Symbol: Equities 

Daily Change 

/ESM4 

+0.09% 

/NQM4 

+0.54% 

/RTYM4 

-0.37% 

/YMM4 

-0.16% 

U.S. equity markets are holding onto gains from earlier in the week as markets prepare for more earnings. As mentioned earlier, Meta is scheduled to report after the closing bell. Boeing (BA) rose in pre-market trading after the embattled airplane maker reported a lower cash burn than expected. AT&T (T) was also higher after strong earnings driven by 5G growth impressed investors. Tesla (TSLA) jumped after CEO Elon Musk said cheaper cars would roll out later this year.  

Strategy: (57DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 16250 p 

Short 16500 p 

Short 19000 c 

Long 19250 c 

64% 

+1350 

-3650 

Short Strangle 

Short 16500 p 

Short 19000 c 

70% 

+4975 

Short Put Vertical 

Long 16250 p 

Short 16500 p 

83% 

+715 

-4285 

Nasdaq

Symbol: Bonds 

Daily Change 

/ZTM4 

-0.07% 

/ZFM4 

-0.16% 

/ZNM4 

-0.27% 

/ZBM4 

-0.52% 

/UBM4 

-0.70% 

Treasuries moved higher this morning following yesterday’s strong two-year auction when the Treasury auctioned $69 billion worth of the notes—a record. Today, traders will have their eyes on the $70 billion five-year auction, which is expected to yield good results because yields aren’t seen rising much even if interest rate cut expectations get pushed back again. 30-year T-Bond futures (/ZBM4) were the biggest loser this morning, trimming -0.52%.  

Strategy (30DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 105.5 p 

Short 106 p 

Short 110 c 

Long 110.5 c 

64% 

+140.63 

-359.38 

Short Strangle 

Short 106 p 

Short 110 c 

71% 

+468.75 

Short Put Vertical 

Long 105.5 p 

Short 106 p 

85% 

+78.13 

-421.88 

US Treasuries

Symbol: Metals 

Daily Change 

/GCM4 

-0.18% 

/SIK4 

+0.03% 

/HGK4 

+0.53% 

Higher yields and a stronger dollar weighed on precious metals this morning, with gold prices (/GCM4) falling 0.25% ahead of the opening bell. U.S. inflation data due later this week could push bets on interest rate cut back if the data comes across as expected, which would pose trouble for precious metals because of higher-for-longer rates. Meanwhile, the tension in the Middle East between Israel and Iran has cooled for now, further weighing on bullion.  

Strategy (34DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 2200 p 

Short 2225 p 

Short 2425 c 

Long 2450 c 

63% 

+720 

-1780 

Short Strangle 

Short 2225 p 

Short 2425 c 

70% 

+2440 

Short Put Vertical 

Short 2225 p 

Short 2425 c 

85% 

+310 

-2190 

Gold prices (/GCM4)

Symbol: Energy 

Daily Change 

/CLM4 

-0.29% 

/HOK4 

-0.91% 

/NGK4 

-3.37% 

/RBK4 

-0.29% 

Natural gas futures (/NGM4) fell today, trimming yesterday’s gains but leaving prices positive for the week. Freeport LNG, a Texas export terminal for natural gas, resumed exports on yesterday following an unexpected outage at the facility. The outage created some upward pressure for European prices, which likely also created increased demand competition from importers in Asia. The resumption of U.S. export flows and cooling tension in the Middle East may see prices head back toward April lows around the 1.9 level.  

Strategy (34DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 1.7 p 

Short 1.75 p 

Short 2.35 c 

Long 2.4 c 

61% 

+170 

-330 

Short Strangle 

Short 1.75 p 

Short 2.35 c 

70% 

+830 

Short Put Vertical 

Long 1.7 p 

Short 1.75 p 

79% 

+100 

-400 

Natural gas futures (/NGM4)

Symbol: FX 

Daily Change 

/6AM4 

+0.15% 

/6BM4 

-0.06% 

/6CM4 

-0.43% 

/6EM4 

-0.15% 

/6JM4 

-0.11% 

The uptick in U.S. Treasury yields is helping to prop up the U.S. dollar today. With energy markets facing difficulties, the Canadian dollar (/6CM4) is leading to the downside. But U.S.-Canada two-year yield spreads have moved in a favorable manner in recent days, and are now at 68 basis points (bps), up from 80bps a week ago. The pullback in /6CM4, coupled with the elevated volatility environment, may be producing an opportunity—thanks to the divergence from yield spreads. 

Strategy (44DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 0.71 p 

Short 0.715 p 

Short 0.745 c 

Long 0.75 c 

70% 

+90 

-410 

Short Strangle 

Short 0.715 p 

Short 0.745 c 

73% 

+190 

Short Put Vertical 

Long 0.71 p 

Short 0.715 p 

93% 

+50 

-450 

Canadian dollar (/6CM4)

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro. 

Trade with a better brokeropen a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies. 

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