Today started with a light 146k ESU and 800 SPU traded on Globex, trading range was 1695.50 – 1690.70. Monday’s regular trading hours (RTH), pit session trading range was 1692.90 – 1685.70 before settling at 1688.30, down 2 handles. China’s Premier Li Keqiang said China’s GDP growth bottom line is 7% and that China’s economy is at a reasonable level. Following some M&A activity in Europe, [CSCO] announces deal for software maker [FIRE] for about $2.7B. This morning’s earnings announcements were a bit more upbeat. Also, the Federal Housing Finance Agency reported US home prices climbed 0.7% in May versus prior month. Home prices increased 7.3% y/y back to Jan 2005 levels, but 11% below April 2007 peak.
Today’s pit hours gapped 3.5 handles higher to 1693.50 – 1694.00, marking the early high. Overseas equities traded higher following Chinese Premier Li Keqiang comments indicating China will act to support expansion if needed and some M&A in Europe and the U.S. After the SPU traded a new contract high of 1694 the equities quietly faded to close the morning gap and on to test yesterday’s low, holding 1686.50 in light volume. Roger_Volz Nasties (Nasdaq) first to go; blue chips last on safe haven rotation as the [BKX] and [XLF] saw some profit taking. Chatter – a player was selling [BAC] calls to buy puts, to open, according to ISEE data, and the bearish combo traded 20x on the day. A shareholder is possibly opening the position to hedge or “collar” recent gains after the one-month 22% surge in the underlying. The Richmond Fed July manufacturing checked in at -11 versus expected +9 and last +8, and the retail employment component fell 12 points lower to end at -14. All the while, crude continues to trade in nosebleed territory.
WB, are we still in the spill? William_Blount (9:21) I am viewing the spill as complete and as you know from the morning commentary CONCERN is possible LINK STINK. If the spill is complete then the 10 a.m. ET high is the POSSIBLE FIX. BULLS NEED to overlap 1691.235 on nano count — and then break out thru 92 QUICKLY or the link stink is still on the table. I WILL BE SURPRISED if we trade through 1711 cash +/- 2 marker without having done the minor wave 4 down. Inter market divergence pretty glaring – [DJIA] vs [QQQQ] vs [SPX].
At 10:30, the European close, the SPU was trading 1688.50 as the sideways to slightly higher – light volume midday grind set in. By 1:30 the SPU was retesting the previous settle 1690.30, but could not hold the small gains above and faded back slightly. redliontrader (13:47) [NYSE] new highs – pretty incredible 261 and the NYSE A/D 1.6, a bit stronger than y’day. However, the MiM, MrTopStep imbalance Meter was much weaker than y’day = early indication of the closing imbalance. [AAPL] was trading new daily lows going into the close – Sam_E (14:43) in the event of an apple washout the algos will take the Nasdaq to 3003.51 then 2995 and then 2988. Normalized without this apple release 3023.75 should have been it. The imbalance was a small $96M to the sell side and the S&P traded 1688 area on the cash close before settling at 1688.30, down 2 handles on the day. It was a mixed close as the Nasdaq led the late-day pullback and the SPX closed lower and the DJIA closed modestly higher on the day. The flash PMI’s start checking in tonight – China at 8:45pm CT tonight, Europe and the U.S. in the morning.