|
|
|
Silexx Finacial Systems, LLC Newsletter
|
|
Obsidian Trading Platform
|
 |
Obsidian brings real-time risk management, complex order handling,
data analytics, trade history information and multi-ticket execution. The Power
to trade in the market, manage risk in real-time, and data analytics are now available
to everyone - from the retail trader to professional broker dealers - an All in
One Platform.
Click Here to get a Demo
|
 |
|
About The Author
|
Michael Williams
|
|
With two decades of experience as an option market
maker and institutional floor broker on the trading floor of the PCX/Arca
Exchange, Michael has been on the front lines in the trading pits. He has
lectured and consulted for exchanges, the SEC, universities, and private
investment funds. He is also the co-author of "The Fundamentals of the
Options Market" by McGraw Hill.
Michael is one of the founders of Silexx Financial
Systems, a financial software company that designed the trading/risk
management platform, Obsidian, used by traders that clear Goldman Sachs and Merrill Lynch. He
is also a partner in Kinetic Strategic Group (KSG) - a private investment
firm.
|
|
|
Traders,
We
saw a slight stall after a great run on the first day of the New Year, but so
far the initial observations on the short-term seem to be rather optimistic.
However, as I pointed out previously the mid-to-long term story will by the
monetary policy and if/when they change. For now there seems to be some peace
in the economic data as we wait for the Labor department's job numbers.
November was a shocker and help boost the market - showing that we are
very close if not already at a bottom of job cuts. This help boost the economic
outlook, the problem is we are getting (maybe) too excited about SLOW DOWN in
job cuts (which is important), but I think the real cheerleading should only
start when we see net job creation - not just less firings. That day
could be coming soon if this trend continues.
|
 |
ADP (private sector job report)
|
|
The
ADP always come out a couple of days before the Labor department numbers and
gives us an idea of what the job market looks like (minus public
sector/government jobs). The ADP job losses were larger than forecast and came
in at -84,000 jobs (cut in the month of December), while it was the smallest
since March 2008 - it was more than expected (73,000). The revision for
November did show improvement, to -145,000 in November from the originally stated
169,000. The trend is definitely improving, remember there is also a season
affect were there are fewer job cuts in December and actually more hiring in November-December
for the holiday sales.
This
does show some promising improvements for 2010. The big questions when the job
cuts slow down, does it start moving positive and at what momentum. The problem
is that companies are increasing productivity (fewer people doing more work)
that means better margins. As the companies cut down to operate with better
margins, they may be reluctant to start increasing jobs (at a robust pace)
until the top line revenue picks up. NPR also had an interest story about job
creation in the U.S. and in their report 7 of the top 10 job creation for 2010 -
will be lower income jobs from retail, food, and services - as manufacturing
continues to move out of this country. The massive layoffs in the auto-sector
(and supporting services) over the last 2 years will most likely not see the
majority of those jobs returning, especially if more brands like Saturn and
others are eventually just shut down (for the lack of selling those divisions).
Computer technology firms are also moving overseas, which is clearly delineated
as the majority of components in computers are now made in Asian countries.
Even Dell has moved some assembly plants off-shore.
It
seems that professional jobs will be less harmed, in NPR's report
Accountants, Doctors, will still see some growth. That college degree probably
more so than in the recent past will increase the divide among the middle
class. Of course the government seems to be hiring. If you work for General
Motors, are you working for the government (since they own over 80% and have
dumped billions into the firm)?
Now
we wait for the Labor numbers and some speculation has it (believe it or not) positive.
That would clearly show, when compared to the ADP, that the government is
hiring enough to take up the slack. Now we wait.
|
| |
Old Man Winter!!!
|
The
cold weather in the northern hemisphere is sending commodities higher. Beijing
reported the coldest weather in 4 decades, Florida citrus crop farmers are
running over time to protect crops from frost, and in England British troops
have been deployed to rescue 100s of motorist stranded in snow covered roadways
(that usually don't see standing snow). The cold weather is hitting
larger populated areas and also sending energy prices higher.
We
are also seeing metals gain as the cold weather continues to threaten
production. Copper and Platinum rose higher and production concerns.
Additionally natural gas is making a good run from recent lows. These maybe
short lived rallies, but it is also exhausting current supplies which could take
months to replenish.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acGKgr5uSp9A&pos=9
|
| |
Futures Pre-market
|
Futures
looks pretty flat in the pre-market. Expect a flat to slightly mixed opening.
|
| |
Support/Resistance
|
INDU 10,500 (We came off a little, but are up above
the 10,500 line which could be a short-term support.)
NDX 1850 / 1900 (We are in the higher end of this range and
a visit to 1900 in January is in the cards.)
SPX 1100 / 1150 (Again a 2% rally in the first two days of
the year, futures looking slightly lower in the pre-market.)
RUT 600 / 650 (Condensing in this range for now.)
|
| |
Conclusion
|
The
ADP numbers, while negative, is showing a positive trend. The question I ask
myself is once the negative trend halts, how robust will the actual growth be.
I think that will be a telling sign as to the fundamental strength of the
recovery, which will most likely trickle down into top-line revenue numbers.
The winter is taking a longer toll on commodities and it isn't just
localized - Europe and Asia is also getting hit with colder than normal temperatures.
I
just heard that Senator Dodd plans on retiring - which could create a
shakeup in the Senate , which the Democrats currently control. I am sure the
next election for our representatives in both houses will see some volatility.
|
|
|
|
|
Disclaimer: Silexx Financial
Systems, LLC is not a registered investment adviser and does not offer
personalized advice. Nothing contained in this email constitutes a
recommendation to buy or sell any security. Our personnel and/or affiliates may
hold positions and/or trade in the securities mentioned. We are not compensated
in any way for publishing information about companies referred to in the email.
The email is for informational purposes only and the views are held by the
author and not Silexx Financial Systems, LLC or its affiliates. Any investments should be made only after consulting
with your investment adviser and only after reviewing the prospectus or
financial statements of the company.
Silexx Financial Systems, LLC, (941) 953-6800
|
|
|
|
|
|
