Chicago’s futures traders will get to trade in the pits a little longer…
The CME Group (CME), the world’s largest futures and options exchange said it would delay the closure of open outcry futures trading in Chicago and New York by a few days.
The pits were previously scheduled to close on July 2. The last day for most open outcry futures trading is now expected to take place on July 6, but could be further delayed for up to 90 days depending on the CFTC’s review.
S&P 500 Futures and Tuesdays Downside Reversal
The S&P futures (ESU15:CME) rallied during Monday nights Globex session, opened higher on the 8:30 open, rallied up to a new daily high at 2120.00, and then slowly worked lower for most of day. With the likelihood of a Greek deal by Friday increasing, and with the Eurogroup meeting today to set the stage for Thursday’s and Friday’s leaders summit meeting, the markets have turned back to a very low volume grind. Despite the Greeks making concessions, it seems like both sides are being forced into a deal that will only last the next 6 to 9 months before creditors are back at the drawing table when a new bail out package will have to be arranged. As we have said many times we think the best solution is to default because there is no way the Greek government can, or ever will, pay all the money back it borrowed.
LOW VOLUMES and the VIX
As one follower on Twitter said; the S&P is up too high to buy, and too firm to sell. Well, that is part of it, but the other part of the low volumes is more people taking time off and going on vacation as the 4th of July holiday rolls around, and it was clear to see during yesterday’s sell off. In most cases a reversal lower, like we saw yesterday, creates higher volume but that is not what happened during yesterday’s sell off. The push back up in the S&P also helped push the VIX back down to 11.93. The 52 week low is 10.58, so the VIX is getting to a scary low, but we are not sure thats going to change anytime soon, and we also think the Greek scare is over, and any downside fear has been, or is being, removed. Does that mean the S&P is setting up to go higher? We think so but we also do not think the S&P will “explode” higher.
For now, the S&P remains range bound, and with the end of the 2Q, and the end of the quarter rebalance coming next Tuesday, and all the movements in the bond market, this could prove to be a very busy month end. I can’t rule out a jab at the upside buy stops, but I also do not feel like getting long at 2120 in the ESU either.
Over the next few weeks pay close attention to the volume in the S&P and how MrTopStep’s trading rule; thin to win plays out.
In Asia 10 out of 11 markets closed higher, and in Europe 7 out of 12 markets are trading lower this morning. Today’s eco calendar starts with MBA Mortgage Applications, GDP, Corporate Profits, EIA Petroleum Status Report, 2-Yr FRN Note Auction, and a 5-Yr Note Auction.
NO VOLUME, NO TRADE, NO VIG
Our View: It’s going on 10:00 PM and I am still at it, and then I will be right back at it at 5:00 am. I don’t know why I press it so hard but I guess its because I think I am going to miss something. Its crazy, but it is the mentality of a trader. Our view; sell the rallies and buy weakness. There are just too many buy stops about not to take a stab at them.
MrTopStep BootCamp Summer offers last until the end of the week!
- In Asia 10 of 11 markets closed higher: Shanghai Comp. 2.48%, Hang Seng 0.26%, Nikkei 0.28%
- In Europe 8 out of 12 markets are trading lower: DAX -0.95%, FTSE 0.27%, MICEX -0.52% , GD.AT -3.81% at 7:00 am CT
- Fair Value: S&P -8.20, Dow -88.94, Nasdaq -8.42
- Total Volume: 835k ESU and 2.2k SPU traded
- Economic calendar: Daniel Tarullo Speaks, Jobless claims, Personal Income and Outlays, Jerome Powell Speaks, PMI services flash, EIA natural gas report, Kansas City Fed manufacturing Index, 3-Month Bill announcement, 6-Month Bill announcement, 7-Yr Note Auction, Fed Balance Sheet, Money Supply.
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