The S&P 500 futures (ESZ19:CME) closed at 3118.50 yesterday, 9 points below its opening print of 3127.50, after closing Monday at 3121.75. Its trading range (3112.75 – 3132.50) remained about the same as days past, but it did touch an all-time intraday high before closing in the middle of its range.
We shorted another two contracts at 3130.00. In total we’re short three contracts at an average price of 3126.50. Closing below its opening print could send a message for some continued overnight weakness. Home Depot sent a message, and with the 4th quarter looking weak, bonds have held their gains.
Just Another Day In Paradise
Just before 2:00, the ES was trading around the 3123 area as the MiM started to show over $1 billion to buy. The futures and held steady as the imbalance began to drop down to $64 million to sell, then down to over $240 million to sell.
The ES went on to print 3122.00 when the 2:45 final cash imbalance reveal showed $221 million to sell MOC, then traded 3119.75 on the 3:00 cash close, and 3118.25 on the 3:15 futures close, down -3.25 handles, or -0.10%, on the day.
In terms of the days overall tone, the gap up, the DAX falling, and the China headlines made mish-mash out of the ES early in the day, but the short covering rally seemed to show how resilient the futures are. In terms of the days trade; volume was steady, with 1.14 million contracts traded.
It’s not easy to write about markets that seem to be doing little more than marking time. Changes in direction often follow periods of what I’ll call “boredom”. It’s coming folks, and will have an effect on just about everything we are currently trading.
The Dollar should decrease and the Euro should increase with Soybeans and Coffee still on the fence just waiting. The 10-year (ZN 12-19) is broadcasting lower interest rates. Watch the 4th quarter numbers; could be a great buying opportunity for the ES if the Fed first moves based upon the data. This is not a market for the newly introduced trader. Darts might work just as well as anyone’s analysis.
The Euro (6E 12-19) is still playing hide and seek with the twenty-day moving average with the Dollar bumping its head on the same technical area. Like the rest, they’re waiting; most movement higher will be met with resistance at first, but more than likely move higher afterwards on the Euro. Anything on the downside will be bought up; the underlying currency cycles have changed, and the Dollar is heading lower. Send me an email at email@example.com, and we’ll get you on board when I finally get my act together, if you want fifty plus years of experience. If for nothing else, the stories are killer.
We’re getting closer to a long entry point. A little cold weather would be nice, but there’s really nothing on the horizon.
And how about them “beans”… Patience is a virtue, but me thinks the downside might not be as large as originally thought. You can never go wrong sitting on the sidelines, and in this case, until we have knowledge of what acreage was planted, I’m happy staying on the sidelines.
By the middle of December we’ll have it all figured out, I hope. Keep emailing me at firstname.lastname@example.org and let me know what you want me to highlight and teach. In the interim, thanks for reading what we post, and enjoy your trading!
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.