on March 5, 2024

Super Tuesdays Down Open Ahead of the Fed

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Our View

I had a long talk with the PitBull yesterday. He looks great and he is doing his best to get back to his stock trading and away from the ES, SPY, and options. He probably doesn’t remember this but many years ago he said he was tired of all the programs in the SPU. He asked what he should trade and I mentioned an oil spread to him and he asked me ‘What do you know about oil?’ Well, the truth is, I didn’t know that much other than it was liquid and volatile and that oil was cheap and the spread went straight up. He went on to be the largest independent oil option trader in the world. Every desk on the KYFE wanted his business, as did every oil option market maker. As oil vol got expensive in crude he stopped trading it and then moved to the CMEs S&P 500 options where again, he became the largest independent S&P 500 options trader. While he admits to being an ES futures ‘junkie’, he also said that he is 100% sure that while it may sound funny that the guys with the better seats are 100% real and buy with all the programs, it is not a fair and level trade. Last night he sent me this:

“Post this—this tree ain’t going to the sky—low a week before Thursday- Friday the week before quad witching.!!!!!!”

Our Lean

There were a few reasons why the ES sold off late in the day and @HandleStats came in before the futures sold off and said they were going down late and he got some help from the weakness in tech and TSLA dropping 7%. I think you sell the rallies again today but whenever the ES goes out on its low they usually pop.

MrTopStep Levels

How to use MTS levels

MiM and Daily Recap

The ES traded down to 5132.00 on Globex and opened Monday’s regular session at 5135.75. After the open, the ES traded 5135.50 and then pulled back to 5137.00 at 11:37. After the low, the ES rallied 10.25 points up at 12:36 and then pulled back to 5138.75 at 1:27. Yes, the ES had one of the slowest grinds of the year. After a small pop-up above the vwap at the 5145 area, the ES had one last pullback to 5142.25 and I posted this in the MTS chat: IMPRO : Dboy : (2:06:23 PM) : going to pop. In one bar, the ES rallied 14.25 points straight up 5156.25 at 2:30. After the rip, the ES had a small pullback then started an upwards back and fill and traded 5157.75 at 3:17, dropped straight down to 5141.50 at 3:37, rallied up to 5149.25, and then sold off down to 5137,00 after the 3:50 cash imbalance showed $1.48 billion to buy and traded 5138.50 as on the 4:00 cash close. After 4:00, the ES sold off down to a new low at 5134.25 at 4:13 and settled at 5134.25 on the 5:00 futures close, down 11.75 points or -0.23%.

In the end, it was the old three parts to the trading day: what happens on Globex, what happens after the 9:30 futures open, and what happens in the last hour. In terms of the ES’s overall tone, it was firm early and weak late. In terms of the ES’s overall trade, volume was low at 196k traded on Globex and there were only 690k until late in the day but the drop piled on another 966k for a total of 1.162 million contracts traded.

Guest Post

Tradrr

Monday having been a bore of a session only gaining a pep in it step through chatter of SMCI to be added to the S&P500. Placing this news into context we have the RTY/Russel holding SMCI as a heavyweight holding in the index potentially opening up the conversation for a rebalancing to occur should it be decided for SMCI to removed with its transition into the S&P500. RTY like the rest of the indices has experienced a bullish trajectory and is important to keep a few of these initiative areas in mind as locations to lean on with the section holding the latest prices to act as a short term line in the sand.