Note: Today, we are giving a one-day open access to the premium version of the Opening Print. For subscription information see the link at the end of today’s edition.

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 6 out of 11 markets closed higher: Shanghai Comp +0.26%, Hang Seng -0.52%, Nikkei +0.04%
• In Europe 9 out of 13 markets are trading higher: CAC +0.21%, DAX -0.06%, FTSE +0.63%
• Fair Value: S&P +0.42, NASDAQ +8.98, Dow -26.63
• Total Volume: 1.16mil ESU & 382 SPU traded in the pit

Today’s Economic Calendar:

Today’s economic calendar includes FOMC Meeting Begins, Personal Income and Outlays8:30 AM ET, Employment Cost Index 8:30 AM ET, Redbook 8:55 AM ET, S&P Corelogic Case-Shiller HPI 9:00 AM ET, Chicago PMI 9:45 AM ET, Consumer Confidence 10:00 AM ET, and State Street Investor Confidence Index 10:00 AM ET.

S&P 500 Futures: Ugly Tech Monday And The End Of The Month

Yesterday, Asian markets closed lower, and Europe was slightly weaker at midday. On Globex, the S&P 500 futures traded down to 2806.50, and made a high at 2819.75, with a total of 148,000 contracts traded. The first print on the 8:30 CT open was 2819.75.

After the open the ES shot up to an early high of 2821.75, and then sold off down to 2812.75. From there, the futures rallied up to the vwap, sold off down to 2810.50, rallied up to 2815.75, and then made several lower lows down to 2807.25. After that, the ES rallied up to the 2812.00 area, then  took out the Globex low by two ticks, down to 2806.00, before breaking down to 2804.00 at 11:15, and then down to 2798.25 at 11:51.

The next move was back up to 2807.25, then up to 2811.25, and then back down to 2800.50 after the MiM went from $350 million to buy, to $350 million to sell, to $935 million to sell. On the 2:45 cash imbalance reveal the ES traded 2802.00, traded 2804.25 on the 3:00 cash close, and settled at 2803.25 on the 3:15 futures close, down -14.25  handles, or -0.51% on the day.

In the end, Facebook (FB) continues to be the ‘problem’ for tech stocks. Some wonder why it is so important, or why a social media stock caries so much weight. I think it’s a good question…  As for the ES’s overall tone, like I said in yesterday’s view, the ES would sell off on Globex and rally, but the question was, could it hold the rally? No, it couldn’t. In terms of the days overall trade, over 1.2 million ES traded on the day. That said, it did not seem like too many people were online.

TODAY’S GAME PLAN:            

DATA/HEADLINES:     FOMC 2 Day Meeting Begins; 8:30ET PCE*, Personal Income/Spending; 9:45ET Chicago PMI; 10:00ET Consumer Confidence;  SOMA redemption day $28.5B due (System Open Market Holdings)

BOJ policy meeting; made small tweaks to policy, forward guidance – maintain low interest rates for an “extended period of time.”  Trump’s former campaign chief Paul Manafort starts his trial today at 9am ET. China manufacturing and services PMIs coming in below forecast. Euro area GDP .3% vs .4% expected; headline inflation picked up.

TRADE IDEAS:   We may see a pause in Nasdaq underperformance for now and this should help sentiment. Curve flattening again and this may weigh on financial sector.  For now, it’s all about mega-tech to at least stabilize and find some rotation other than energy. If ESU breaks 2790 area we would be on guard for rotation lower.

TECHNICAL LEVELS:

Colors within the report: Green is always the 200 period (day, week, etc.). Red is always 21, Blue = 50, Brown= 100,  *Stars have more emphasis, meaning 2 or more technical pts line up.

EQUITIES:    AAPL reports earnings today.  President Trump is considering tweaking the tax code to allow investors to index their capital gains to inflation. Morgan Stanley’s chief strategist says the stock market is in a “rolling bear market.”

ESU is +.25% higher this morning.  A break of 2790 area may turn momentum lower, but holding well above it for now.

The Facebook Mess Continues

Our View:

It’s hard to believe that a social media company can disrupt the markets so much, but it has, and continues to. Sure, Mark Zuckerberg warned that his company’s earnings would fall short a few months ago, but where does all the disconnect come from? The PitBull asked me what I thought, and I said it would take a couple of days for the tech selling to let up, and that this is not the end of the bull market.

As you all know, I was on the trading floor at the CME Group for close to 38 years. It was a very competitive environment, but there was also a lot of camaraderie, even if you made a trade with a guy and he won and you lost. Despite all the fights and competition, life went back to normal after the close. For the most part, the trading floor was a very tight knit group of people all trying to achieve success. When a trader died we all looked at it like a fellow soldier had passed. Even today I still hear of guys passing away on FB or by emails from people.

The video I am posting today is about an S&P pit order filler by the name of Bobby Gault who thought his family has been killed in a plane crash. I knew Bobby and he was one of the nicest guys on the floor, but when word broke about his family the entire S&P quadrant felt his loss. After a few days word got back that his family was ok, and he brought his son on the floor.

Here was his triumphant return after the ordeal:

So, next time you hear that traders don’t care about anything but money, send them this video!

Our view; it’s hard to tell if the FB related selling is over yet, but I suspect it’s close. I actually had 2798 as support, and if the ES flunks through there, I have 2790 and then 2783-85. It’s  the last trading day of July and we think there could be more MOC selling on the close. We lean to buying the early weakness and selling the rallies. The bulls need to see the ES get above and hold 2827 and then 2822 to keep going higher.

Market Vitals Technical Analysis for Tueday 07-31-2018

[gview file=”https://mrtopstep.com/wp-content/uploads/2018/07/Market-Vitals-18.07.31.pdf”]

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.}