China Headlines Rock September Quad Witching

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 7 out of 11 markets closed lower: Shanghai Comp -0.98%, Hang Seng -0.81%, Nikkei +0.16%
• In Europe 12 out of 13 markets are trading lower: CAC -1.03%, DAX -1.13%, FTSE -0.40%
• Fair Value: S&P +1.46, NASDAQ +21.20, Dow -16.72
• Total Volume: 1.45 million ESZ & 206 SPZ traded in the pit

_{*As of 7:00 a.m. CST}

Today’s Economic Calendar:

Today’s economic calendar includes Chicago Fed National Activity Index 8:30 AM ET, PMI Composite FLASH 9:45 AM ET, John Williams Speaks 9:50 AM ET, James Bullard Speaks 1:00 PM ET, and Mary Daly Speaks 2:30 PM ET.

S&P 500 Futures: Late Day Drop And Big MOC To Buy

Chart courtesy of Stewart Solaka @Chicagostock – $ES_F Failed to overcome prior highs, back inside its box and 3rd attempt at 2985.

During Thursday nights Globex session, the S&P 500 futures were held to just a 12 handle range, printing a low at 3005.75, and a high at 3017.00 going into the 8:30 CT opening bell. The futures opened Friday’s regular trading hours (RTH) at 3015.00, and initially took a hit down to 3011.50, before rallying to print a new high at 3018.00.

It was a slow morning, to say the least, and it looked like traders were just jockeying for position in anticipation of the Quadruple Witching expiration. The ESU was held to just a 10 handle range for most of the morning, and didn’t break out until after the noon hour.

As expected, some people needed to get screwed, and sticking to the script was Reuters with a Tweet saying the China delegation set to visit farms in Montana had canceled the trip, but also that U.S. farm officials would be visiting China again sooner than expected. This sent stocks into a tailspin, and within minutes the ES had broken 25 handles to print a new low at 2985.25. 

After the drop the ES traded back up to 3003.25, then sold off down to the 2997 00 area, as the MiM went from $800 million to buy, to over $1.5 billion to buy. The futures went on to trade 2997.50 as the 2:45 cash imbalance reveal widened out to $2.2 billion to buy. On the 3:00 cash close, the ES traded traded 2993.00, sold off down to 2988.25, and went on to settle at 2989.25, down -18.25 handles, or -0.61%, on the day 

In the end, the China headlines gave new meaning to the “September Quad Witch Walk Away Trade.” In terms of the ES’s overall tone, it was weak, but the big discount between the ES and the S&P cash could signal a head fake. In terms of the days overall trade, x million December futures contracts traded.

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_{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. Any decision 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.}