The CME Groups S&P 500 E-mini futures have been open for 68 regular sessions and 71 Globex sessions so far in 2015. Presidents Day, MLK and Good Friday closed. Of those 68 cash sessions, the ES futures have closed higher on 31 occasions and closed down on 37.
In the world of buying and selling, 2015 has not been like many we have seen over the six-year bull market run. I don’t pretend to be an analyst or an economist, but I continue to think something is changing. Is it the threat of higher rates, or has the big show moved to Europe with its massive bond buying program?
S&P Futures: Up 4 of the last 5
Yesterday the S&P futures (ESM15:CME) did the exact opposite of what the futures did on Monday: they sold off and rallied hard. I do my very best to try and stay away from pointing out chart levels, and provide what I call a “feel” for the markets, i.e. direction. While I completely agree that pivots are an important part of picking levels, I also believe that it really helps traders to start to try and interpret the S&Ps price action just by following the prints and the volume.
I know this is not the traditional way of reading the markets, but with the algorithmic programs making up 70% to 80% of the volume and distorting the direction, you have to be able to detect when there is an actual event driving the S&P and when it is just some low-volume program designed to retrace the Globex ranges and run buy and sell stops above and below. I think there are two driving factors for why the S&P should continue up. The first is the energy sector. Despite the large drop in crude oil prices, crude oil futures have closed higher 4 days in a row, up 2.7% yesterday to their highest close this year, and up 12% this month alone, though still down 49% from a year ago. As oil firms up, money is going back into the energy sector. The other factor that has has lent support to the S&P 500 are a handful of positive earnings reports amid an overall down season.
As I have said many times, traders need to use all the tools they can to make money, but I really believe that when you do the work after the close to prepare for the next day you gain a much better overall feeling for the markets. I still think the ESM15 is going up into the April options expiration, but I don’t think the S&P will explode higher or go to 2150 anytime soon.
In Asia 7 out of 11 markets closed lower and in Europe 9 out of 12 markets are trading higher. Today’s economic calendar includes MBA mortgage applications, Empire State mfg survey, James Bullard speaks, industrial production, Atlanta Fed business inflation expectations, housing market index, EIA petroleum status report, Stanley Fisher speaks, Beige Book, Jeffrey Lacker speaks and earnings from BTO,ABT, APH, ALV, AN, BK, BA, KO, DHI, EVR, GD, GNTX, KNX, LAD, MKTX, MCD, MTG, BABY, NLSN, NOC, NS, OC, RAI, RES, R, STJ, TEL, TDY, TMO, TUP, WERN, ATC, ALGT, AFOP, T, CTXS, CLB, CLGX, EBAY, FFIV, FTNT, INFN, IGT, NXPI, ORLY, QCOM, RHI, SLM, SKX, TAL, TXN, TSCO, TYL, XLNX, and ZNGA.
Running in Circles
Our view: The S&P cash study for the April options expiration shows somewhat positive stats for the day, up 14 / down 11 of the last 25. Tomorrow (Thursday) is the exact opposite, up 11 / down 14 of the last 25. Yesterday the ESM15 did 1.26mil contracts, its highest volume in over 2 weeks, and has closed higher 4 out of the last 5 sessions or up 7 of the last 9 sessions. Our view is to continue to sell the early rallies and buy weakness.
April Expiration Study:
https://mrtopstep.com/wp-content/uploads/2015/04/ExpirationStats_4.pdf
“S&P 500 Shake & Bake”
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 9 out of 11 markets closed lower: Shanghai Comp. -1.24%, Hang Seng +0.21% , Nikkei -0.20%
- In Europe 9 of 12 markets are trading higher: DAX +0.45%, FTSE +0.45%, MICEX +0.92%, Athens GD.AT-2.37 % (at 6:00 am CT)
- Fair value: S&P -7.13, Nasdaq -8.63 , Dow -87.84
- Total volume: 1.26 mil ESM and 4k SPM traded
- Economic schedule: MBA mortgage applications, Empire State mfg survey, James Bullard speaks, industrial production, Atlanta Fed business inflation expectations, housing market index, EIA petroleum status report, Stanley Fisher speaks, Beige Book, Jeffrey Lacker speaks
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