Yesterday, the S&P 500 (ESU17:CME) steamboat continued to push higher as sentiment continued to drift from fearful and pessimistic early in the week, to risk-off into the end of the month and today’s non-farm payroll. The 2421.00 low from Tuesday’s Globex session lead to a print of 2474.25 in yesterday’s regular session, as buy stops continued to be taken out, and shorts were once again plowed over.

On the 8:30 am cst opening bell, the ESU17 printed 2463.75, up 8.25 handles, and the benchmark futures remained above the open for the duration of the session. The market pushed up to a 2469.50 first hour high, pulled back five handles into the Euro close, and then pushed higher again in the afternoon before making a high of day in the closing hour of 2474.25, a tick below the mid month high. In the end, the ES settled the day at 2470.50, up 15.00 handles, on volume of 1.7 million contracts, with the MOC reported as $1.3 billion to buy.

In the morning I came into the IMPRO room before the open and posted that:

Dboy:(8:50:25 AM):Stops above 2460 to 2464-66 then again above 2468

And the S&P 500 futures continued its relentless pursuit of new all time highs, essentially once again erasing the prospect of a correction, even as problems persist in North Korea, and the bad seasonalities loom.

Trading before Labor Day Slightly Bullish

– From Stock Traders Almanac

In recent years, Labor Day has become the unofficial end of summer and the three-day weekend has become prime vacation time for many. Business activity ahead of the holiday was more energetic in the old days. From 1950 through 1977 the three days before Labor Day pushed the DJIA higher in twenty-five of twenty-eight years. However, since then the days leading up to the long weekend have become mixed. In the last 22 years, the Friday before Labor Day is slightly bullish, but only slightly. The Russell 2000 small-cap index has the best record of gains, up 63.6% of the time, but sizable declines in 2013 and 2011 keep its overall average performance in check.

While You Were Sleeping

Overnight, equity markets in Asia and Europe traded higher across the board, as traders reacted to solid manufacturing data out of London, and also wait for this mornings jobs report.

In the U.S., the S&P 500 futures opened last night’s globex session at 2470.25, and printed the overnight low of 2470.00 almost immediately. As European markets opened, the strength in the overseas index markets helped fuel an ES rally up to 2477.00, which is currently the high. As of 6:45am CT, the last print in the ES is 2476.50, up +6.5 handles, with 112k contracts traded, and it looks like a new high will be coming shortly.

In Asia, 9 out of 11 markets closed higher (Shanghai +0.19%), and in Europe 12 out of 12 markets are trading higher this morning (FTSE +0.32%).

Today’s economic calendar includes Motor Vehicle Sales, Nonfarm Payrolls Report (8:30 AM ET), PMI Manufacturing Index (9:45 AM ET), ISM Manufacturing Index (10:00 AM ET), Construction Spending (10:00 AM ET), Consumer Sentiment (10:00 AM ET), Baker-Hughes Rig Count (1:00 PM ET).

Our View

Another Globex session, and a new high for the week, as the ES was up as much as 7.00 handles this morning. Today is NFP, and frankly, they have not been very exciting over the course of this year. It is also the first day of the month, which could increase the money flow today.

However, today is also the Friday before Labor Day weekend, which marks the unofficial end to summer, and if the morning trade doesn’t give much opportunity, then we expect traders will head for the exits after the first hour, into the Euro close.

Our view today is simple. We will use the 7:30 NFP print and the 8:30 cash open prices as pivots. Our late friend WB used to say that it’s hard to find intraday reversals on a Friday, therefore, if the ESU is above the open, we want to be long, not short, and if it trades below the open, we lean toward being short.

Bears were making a series of lower highs in August, however, now it appears they are out of ammo, and going into September, this is their last shot to show up before new all time highs and 2500.

Market Vitals for Friday 09-01-2017

[gview file=”https://mrtopstep.com/wp-content/uploads/2017/09/Market-Vitals-17.09.01.pdf”]

As always, please use protective buy and sell stops when trading futures and options.

  • In Asia 9 out of 11 markets closed higher: Shanghai Comp +0.19%, Hang Seng -0.06%, Nikkei +0.23%
  • In Europe 12 out of 12 markets are trading higher: CAC +0.86%, DAX +0.80%, FTSE +0.32%
  • Fair Value: S&P -0.56, NASDAQ +1.86, Dow -4.79
  • Total Volume: 1.7mil ESU, and 3.9k SPU traded in the pit

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