/ February 12
Daily Briefing
*The stock market had a mixed showing yesterday, with major indices trading above and below prior closing levels; there wasn't a lot of conviction on either side of the tape and the choppy action followed the ebb and flow of mega cap names;
*The Dow Jones Industrial Average, which closed +0.3% higher, outperformed the S&P 500 (+0.03%) and Nasdaq Composite (-0.4%) through the entire session;
*SPY is continuing to consolidate throughout its recent range, supported by positive gamma exposure from dealers; this translates into a rangebound price action, where dips are bought and rallies are sold; to the upside, resistance stands at $615 (M-Trend, close to Call Gamma Flip), while technical support is now established at $598 (50-DMA);
*The MACD signal is not really showing any direction right now, as the consolidation action translates into flat momentum;
*NVIDIA (NVDA, -0.6%) was a standout in the mega cap space, trading up as much as 0.7% at its high and and down as much as 1.9% at its low;
*The technology sector still logged a +0.2% gain, bolstered by a sizable move in Apple (AAPL, +2.2%) shares after news that it's aiming to partner with Alibaba (BABA, +1.3%) to develop artificial intelligence for China iPhone users, according to The Information;
* From an options market perspective, bullish volume (calls bought + puts sold) was recorded in Utilities (XLU), Basic Materials (XLB) and Consumer Discretionary (XLY), while Healthcare (XLV) and Financials (XLF) lagged;
*The market was digesting more news about tariffs and was focused on Fed Chair Powell's semiannual testimony before Congress, which began yesterday in the Senate Banking Committee; Mr. Powell again said that there is no hurry to adjust the policy stance, repeating comments made at the conclusion of the January FOMC policy meeting;
*The tariff talk wasn't exactly breaking news with President Trump imposing the previously announced 25% tariffs on steel and aluminum, which will go into effect on March 12 with Australia potentially receiving an exemption;
*Treasuries settled with losses; the 2-yr yield rose two basis points to 4.29% and the 10-yr yield settled four basis points higher at 4.54%; the market had a muted reaction to the $58 bln 3-yr note sale, which met strong demand;
*TLT lost -0.64% on the day, and broke support at $89 (M-Trend); we can now expect increased volatility in the treasury market due to the fact that dealer gamma exposure is expected to turn negative at these price levels; Enterprise is maintaining exposure to bonds at the moment;
*We have issued a corrected trade list and portfolio for Millennium Alpha, after fixing an error in the rebalancing schedule (check your email for details);