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Market Review

Globex

MrTopStep Opening Print: Greatest 50-Day Rally Of All-Time

As the S&P woke up to the ‘new realities’ of COVID19 the (ESM20: CME) sold off quickly and hard, off nearly 34% from it’s all-time 2020 high. As the news continued to pile up the futures accelerated lower but after making its low at 3174 on March 24th to yesterday’s high the ES has rallied 955.50 handles. The S&P staged the greatest 50-day rally of all time and has averaged a net gain of 0.80% gain per-session. While there were larger rallies during the ‘Great Depression’ few outmatched the speed and ferocity of the most recent rally. I knew when the S&P was down over 30% it was a buy because the S&P has never closed down 30% in a year. I also knew crude oil was a buy of the century!

YESTERDAY: ES 3100 OBJECTIVE MEET

As for yesterday’s trade, the ES opened at 3098.75, rallied a little and sold off down to its early morning low of 2096.00. After the low, the ES slowly moved higher popping all the way up to 3129.50 after the MIM showed nearly $2 billion to buy and settled at 3117.50 on the 3:15 futures close. In terms of the ES’s overall tone, it was firm and met my ES 3100+++ objective. In terms of the day’s overall trade, volume was lower, a total of 1.6 million futures traded with 350,000 coming from Globex making total volume 1.25 million traded on the day session.   

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

Cat was out of the bag at 14:00 ET as the market took higher on early MOC news.  That strength played out all the way into the close with a 1.2B buying imbalance at the 15:50 reveal, which set the day’s antennae high and fell into the final 10. 

Reminder:  June is Russell 2000 reconstitution month.  Here is the schedule for that: 

• Friday, May 8 – “rank day” – Russell US Index membership eligibility for 2020 reconstitution determined from constituent market capitalization at market close.
• Friday, May 22 – “query period” begins – preliminary shares & free-float information for Russell 3000 Index constituents are published daily & queries welcomes (query period runs through June 12)
• June 5 – preliminary US index add & delete lists posted to the FTSE Russell website after 6 PM US eastern time.
• June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
• June 15 – “lockdown” period begins – US index adds & delete lists are considered final
• June 26 – Russell Reconstitution is final after the close of the US equity markets.
• June 29 – equity markets open with the newly reconstituted Russell US Indexes.

Questions?  Please email me: Marlin@mrtopstep.com

Get the skinny when we get it:  Join the MiM. 

Chart of the Day

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Our View

ES UP 955.50 Handles From March 23rd Low

Our View:

The upside in the S&P futures 955.50 handle rally has been greased by all the US government and Federal Reserve stimulus and quantitative easing programs. While the rally has the look and feel of the credit crisis’ no-stop rally we all know it’s different this time. It’s 9:00 PM CT and the ESM just traded down to 311.00. My gut feeling is that the ES is very overbought and overdue for a pullback. The ES has run so many buy stops and run so many buy programs all it will take is a few negative headlines and it will be trading 3090 or lower. Ideally, Wednesday night’s 3075 Globex low would be a good spot to try the long side. 

Our view, the S&P looks so great it must be a sale. That doesn’t mean we won’t buy some drops but ideally our lean is to sell the pops! 

Danny Riley is a 39-year veteran of the CME  trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.

Market Vitals Technical Analysis

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

_{Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.}