Well, there was a break down to 2682.50 on Globex Tuesday night, and a rally all the way up to 2693.75 as the passage of the Trump tax cut bill neared. During Wednesday’s day session the ES sold back off as a headline hit the tape that a White House aide said that President Trump may not sign the tax bill until January.
Up, Down, And All-Around / House Passes Tax Bill
Wednesday’s trade started with a total of 126,000 ES traded on Globex. On the 8:30 bell, the futures upticked to 2695.50, and then in came the sell programs as traders sold the news, initially pulling the futures back down to 2683.00. The ES then rallied back up to 2688.50, 1 tick shy of the vwap, and then got hit by another wave of sell programs, through the Globex low down to 2679.00. After the low the ES traded back up to 2685.75 before pulling back down to the globex low at 2682.50, and then double topped at 2686.25 before dropping down to 2682.00.
It was a slow day. There were some decent ups and downs, but you could tell people were cutting back. Going into 12:00 the house passed the tax bill and the ES jumped up to 2688.25, and then sold back off to 2681.50 as the MiM showed big for sale just after 2:00. The ES popped back up to 1 tick below the vwap at 2585.75, and then traded back down to 2681.75 on the 3:00 cash close, down 1.75 handles. On the 3:15 futures close the ES traded 2681.75, down 2.75 or -0.10%.The best trade of the day was selling the gap up. By the time the 8:30 futures bell rang, all the buying had been used up. As far as the passage of the tax bill, yes the ES popped a little, but the news was already priced in, and after the uptick, the ES struggled to hold the bid. Despite all the movement / chop, the ES did under 950,000 contracts, including the 126,000 from Globex. In the end the S&P 500 futures (ESH18:CME) settled at 2683.50, down -2.25 handles, or -0.08%; the Dow Jones futures (YMH18:CBT) settled at 24,756, down -36 points, or -0.14%; the Nasdaq 100 futures (NQH18:CME) settled at 6508.25, down -11.25 points, or -0.17%; and the Russell 2000 (RTYH18:CME) settled at 1542.60, up +1.00 points or +0.06% on the day.
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 6 out of 11 markets closed lower: Shanghai Comp +0.40%, Hang Seng +0.45%, Nikkei -0.11%
- In Europe 7 out of 12 markets are trading lower: CAC -0.03%, DAX -0.08%, FTSE +0.46%
- Fair Value: S&P +2.45, NASDAQ +20.43, Dow +5.44
- Total Volume: 956k ESH & 526 SPH traded in the pit
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