Despite an early rally and selloff, it was business as usual during Wednesday’s S&P 500 futures (ESM15:CME) trade. For over 2 month the S&P futures have been stuck in a narrow trading range with occasional quick selloffs and rallies. They really don’t seem to know what they want to do. After another day of low volume “chop” the S&P closed literally unchanged, down -0.50 points.
It was another quiet day, on a list of many this year, as the dollar slipped to its lowest level in almost four months, while Treasuries rallied and European bonds fluctuated. As the dollar heads to its 5th weekly decline, the US economy continues to struggle. Despite all the domestic and global negatives, the S&P remains less than 13 points (less than 1%) off its all time contract high set back in March.
I have stated my case, and I am sticking to it, that all the recent sell offs have done is add more buy stops above the market, and that this week the S&P futures will attempt to take out the old 2019.75 contract high. Sure the the German Bund is a concern; it is more than 14 times higher than the record low of 0.049 less than a month ago, but that does not seem to be affecting the S&P right now.
I will say one thing though; even the downside volumes are starting to decline. That is a big problem for the markets right now, but it will be an even bigger problem as the summer rolls in.
In Asia 5 out of 10 markets quoted close higher, and in Europe 8 out of 12 markets quoted are trading higher this morning. Today’s economic and earnings scheduled starts with Jobless Claims, PPI-FD, EIA Natural Gas Report, 10 Yr-TIPS Announcement, 30 Yr-Bond Auction and earnings before the open from: PLCE CMGE GIL KITE KSS PBH TK TNK, and after the close from: AMAT ANET CCIH CRMD DDS EXP LOCO GLOB HOLI ISR JCP KING LFL MDLY JWN QUNR SINA SYMC WB.
Our View: 2100.00 – 2113.00 is the failure zone for the e-mini S&P. After so many rallies above 2100 followed by failures yesterday’s failure was not a surprise. But we also were not surprised by the big rally that ensue after the decline. I really thought there was a chance the algos chase the stops above 2110.00 but the ESM15 stalled out early at 2106.50. I think today is the day the ES moves above 2110 to 2116. Can they take out the buy stops above 2116.70 to 2126? That’s yet to be seen, but it is coming.
S&P cash study for the May expiration:
- In Asia 5 of 10 markets quoted closed higher : Shanghai Comp. +0.06% , Hang Seng +0.14%, Nikkei -0.98%
- In Europe 8 out of 12 markets are trading : DAX +0.08%, FTSE -0.11%, MICEX -0.14% , GD.AT +1.22% at 7.00 CT
- Fair Value : S&P -4.04, Nasdaq -4.14, DOW -45.37
- Total Volume: 1.33mil ESM and 7k SPM traded
- Economic calendar : Jobless Claims, PPI-FD, EIA Natural Gas Report, 10 Yr-TIPS Announcement, 30 Yr-Bond Auction.
[s_static_display]
No responses yet