After selling off on Monday the S&P 500 futures sold off down to 3213 during Tuesday’s day session and recovered from its early loss ending the last trading session of the year higher. Initially, there was an end of the year rebalance, buying the Russell 2000 and selling the S&P 500 but as the day dragged on the (ESH17:CME) Adding to the overall firmer tone President Trump said he will sign the first phase of a trade deal with China on Jan 15 at the White House. Early in the day, one negative that stuck out was that the VIX ($VIX) rallied to a fresh two-week high at 15.39 but sold off down to 13.78 after 2:00. The MrTopStep MiM started to show over $2 billion to buy and went up to $3.2 billion to buy pushing the S&P futures up to new daily highs on the close at 3236.75, up 23.75 handles off its low.
In terms of the ES’s days overall tone, it was weak early and very firm late. In terms of the day’s overall volume, 1.1 million futures traded with over 250,000 contracts trading in the final hour and a half.
Economic Calendar
Closing Prices
In the Tradechat Rooms
The MiM
Our MIM started off with a small sell imbalance and flipped with just 20 minutes to go in the last trading session of the year. Once flipped, we quickly built up the buy-side. That 3 pm ET bar started the last bull run of the decade. The MIM flipped and prices really moved, gaining a solid 9 ES points and presenting a 3.2B imbalance. That paired away but at much higher prices.
Our View
It’s Wednesday night at 6:30 CT and the ES just traded up to 3240.75, up 37.75 handles from its Tuesday 3213.00 low. There are a couple of variables, the first is new money generally moves into stocks on the first three or four sessions of the new year and on the flip side is the beginning of the year tax selling. My gut says we see lower prices but I do not think everyone is back from the holidays making ‘thin to win’ a real possibility. Our lean is to get a look at the price action before making any trading decisions.
Video of the Day:
Walter Gallwas from RCM Alternatives:
Market Vitals Technical Analysis
As always, please use protective buy and sell stops when trading futures and options.
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