Premium OP: Up, Down, All Around

Market Review

 S&P 500:

The ES traded 3000.75 on Friday’s open, rallied up to an early high at 3076.75 at 8:40 CT and then dropped 88.50 handles down to 2989.75 at 10:21. After the drop, the ES rallied 57 handles up to 3045.25 at 11:07 am CT. After the rally, the ES dropped 74.25 handles down to 2971.00 going into 2:00. The ES started to short cover late as the MIM started to show over $800 million to buy early. At 2:30 the ES traded 3005.00, traded 3020.00 on the 2:50 cash imbalance as the MIM showed $1 billion to buy. On the 3:00 cash close, the ES was 3033.75 and settled at 3024.25 on the 3:15 futures close, up 21 handles or +0.71% on the day. 

In terms of the ES’s overall tone, it rallied late but it was MIM buying / squeezing out short during the late day rally. In terms of the ES’s overall trade, volume was on the high side with 2.85 million futures traded.

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

It was all lights green on the MiM early and prices marched higher into the close, a nice 60+ move.

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

Top Stories on MTS Overnight:

• Nikola Badger Pickup
• Divergences Continue To Point To Dollar Correction Lower
• Taper Talk Heats Up, But Stronger Yen Takes Markets Lower
• Key Pivots Europe Edition 9.30.13
• Boeing dives 12% after supplier is directed to pause…
• Are Options Traders Betting on a Big Move in TrueCar…
• Equity Index Futures Rollover Dates
• NYSE Holidays 2020 Stock Market Schedule
• European shares, US futures higher after Wall St rout
• Trade the Bullish Engulfing Pattern
• S&P 500 Futures: The One Day Sell Off…

Our View

June Quad Expiration Week

According to the Stock Trader’s Almanac, the Monday before the June Quad Witching (today) has the Dow up 12 of the last 16 occasions. Expiration Friday has the Dow down 12 of the last 19 occasions, down 4.6% in 2002 and down 2.5% in 2110.

Our view, it definitely feels like we are seeing an uptick in volatility. There were large swings last week and it’s my guess we will see the same thing this week. The big uptick in COVID19 cases and new nationwide protests due to the killing of a Georgia man by an Atlanta police officer will be front and center. Our lean, if there is one thing that is clear it’s that the stock market is in a state of flux. It’s 8:20 pm CT Sunday night and the ES is trading 2984.00, down 40 handles or -1.34%, my guess it will continue to short cover into Monday morning. But…if it doesn’t and it takes out the 2969 low by 3 or 4 handles I think there could be a quick 40 handle drop. Ideally, I want to get a look at the first 30 miniatures of trade to get a feel for the price action. 

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

Did you know that your premium membership gives you access to our Market Vitals? Click on the image below and get today’s key levels.

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.}