China Warns Trade War Could Escalate Into ‘Great Depression Or World War’

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 6 out of 11 markets closed higher: Shanghai Comp -1.32%, Hang Seng -0.87%, Nikkei +0.39%
• In Europe 12 out of 13 markets are trading higher: CAC +0.68%, DAX +0.27%, FTSE +0.76%
• Fair Value: S&P +0.36, NASDAQ +5.47, Dow +3.43
• Total Volume: 1.86mil ESZ & 574 SPZ traded in the pit

_{As of 8:00 AM EST}

Today’s Economic Calendar:

Today’s economic calendar includes the Weekly Bill Settlement, Jobless Claims 8:30 AM ET, Personal Income and Outlays 8:30 AM ET, Pending Home Sales Index 10:00 AM ET, EIA Natural Gas Report 10:30 AM ET, Loretta Mester Speaks 2:00 PM ET, Charles Evans Speaks 2:00 PM ET, FOMC Minutes 2:00 PM ET, Robert Kaplan Speaks 3:00 PM ET, Farm Prices 3:00 PM ET, Fed Balance Sheet and Money Supply 4:30 PM ET.

S&P 500 Futures: Fed Chairman Powell, Gradual Rate Increases Are Uncertain

Chart courtesy of @Chicagostock – $ES_F Turkey decline recovered after opening above 2684 to keep shorts trapped and force buyers to chase, giving way for stop run > last Monday’s 273475 high.

After a firm close on Tuesday, the S&P 500 futures sold off down to 2681.00 on Globex, and traded 2695.00 on Wednesday mornings 8:30 futures open. After the open, the ES sold off a few handles down to 2692.50, and then made an early morning high at 2698.00. After the high the futures made two lower highs and two lower lows that pulled the ES back down to 2684.25 at 9:34. From there, we saw a rally up to 2694.00, followed by a pullback to 2690.00.

A big headline news algo buy program activated at 11:00 forcing prices back down just as Fed Chairman Powell’s comments hit the tape that he and other policy makers continue to see a solid outlook for the U.S. economy, while noting that interest rates are “just below” the so-called neutral range. “We also know that the economic effects of our gradual rate increases are uncertain, and may take a year or more to be fully realized,” he said. At the time those comments came out the ES was trading around the 2691.00 area, and by 11:53 CT had rallied all the way up to 2735.25, up +52.25 handles on the day. Clearly, the fed’s dovish tone fueled speculation that the central bank is closer than we thought to pausing on rate hikes.

After the high the ES pulled back down to 2728.25, and then rallied 5 handles up to 2733.00, before getting hit by a 2:00 CT sell program that pulled the futures back down to the 2725.00 level. At 2:35 the ES traded back up a new high at 2738.00 as the MiM increased to $635 million sell. On the 2:45 cash imbalance reveal the ES traded 2740.50 as the final MiM flipped to $600 million to buy. On the 3:00 cash close the ES traded 2744.50, and went on to settle at 2740.50, up +57.00 handles, or up +2.12% on the day.

In the end, the markets are all about ‘good cop / bad cop’. Last Friday the markets sold off when Trump said there was no progress on the tariffs, and that he was ready to impose an additional $250 billion more if the G20 talks failed, and yesterday they rallied off the fed’s comments. In terms of the ES’s overall tone, the buyers were buying on every little dip, and never let up. In terms of the days overall trade, total ES volume was 1.8 million contracts, which is not bad, but it never would have gotten that high without the headline algos.

Daily HotSpots

HotSpots are times during the market trading session that for the past XX days have consistently moved in one direction or the other. These HotSpots are published each morning pre-market. The next day, a results post is also published and weekly a summary post.

CAUTION: This data is under development and provided only for research and teaching purposes

If you have questions about HotSpots you can contact us at info@mrtopstep.com.

Lookbacks:

The lookback period (number of days) is set at 21,13,11,8 and 5 days. A heat-map is generated for each of these lookback periods, the best trade from day is scored.
The period of time that has consistently produced the best results becomes the hotspot for that look back. There are also different look-back types like Taylor and Taylor Plus.
Taylor cycles are usually 3-day cycles. A Taylor-5 look-back would use the last 5 trading days skipping back by 3 trading days. Taylor Plus uses calendar days so weekends and none
trading days are counted as part of the skip count. If a lookback period falls on a none trading day, it is not used so a TaylorPlus will continue skipping back until 5 trading days are found for the heatmap calculation.

Get all of today’s HotSpots here

SIGN UP HERE TO GET THE FULL MRTOPSTEP OPENING PRINT!

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. 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.}