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S&P 500 Futures Recap – Trade Date April 15, 2021
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Chart of the Day
GMTT / Chart of the Day / VIX Index (Cash) / April 15, 2021
VIX (cash)
The VIX reached 15.55 and closed again end of day above 16.40. For now, we stick with our forecast that the VIX will make a significant bounce. We keep the long position In the VIX (from 16.85). The projected short term upside targets are still 18.05, and then 20.35.
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Our View
Record Profit at JPMorgan and Goldman
The banks reported good earnings. JP Morgan and Goldman reported record profits Wednesday while the smaller Wells Fargo reported its best ever quarterly profit on record. The S&P 500 futures (ESM21:CME) initially rallied off the news but the uptick gave way to several ‘tech sell’ programs. At 12:00 ET the ES was trading 4136.25, up 2 points and the NASDAQ futures (NQM21:CME) was trading 13915.00. The combination of selling the better bank earnings and the big funds selling stocks to buy the Coinbase IPO put selling pressure on the index markets late in the session. I have seen this many times; as investors cheer the new listing the broader market suffers. While I am not saying this will happen, there have been times when the big IPOs have helped put in stock market highs.
At 1:34 ET both the ES and NQ started selling off. The ES traded 4133.50 and the NQ was at its session lows at 13856.00. At 3:12 the ES traded 4113.00 and the NQ traded down to 13,783.50, down 1.3%. Going into 3:00, both futures had bounced off the lows. After 3:00, the MIM went from over $400 million to sell to $670 million to sell. The 3:50 imbalance came out at $650 million to sell and the ES settled at 4123.25, down 11.00 at 4123.25. In terms of the ES’s overall tone, it got dragged down by the weakness in the Nasdaq and the residual selling from the Coinbase IPO. In terms of the day’s overall trade, 1.49 million ES traded which is about 480,000 contracts higher than the last several sessions.
Our view, while Wall Street has been turned to dust the big banks are flourishing. JPMorgan’s investment bankers brought in $3 billion, up 57% and also a record and Goldman’s investment bankers brought in a record $3.8 billion in fees arranging mergers and securities offerings. Clearly, the guys with the better seats do better when everyone is losing. Our lean, unless there is something bad coming, an unforeseen headline, I think the ES is going to push up above 4160. I can’t say there won’t be a few rallies but what I can say is buy the pullbacks, the trend is your friend.
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Danny Riley is a 39-year veteran of the CME trading floor. He ran one of the largest S&P desks on the floor of the CME Group since 1985.
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
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