Macro-Market_Profile

A Round Trip To Nowhere

Nothing comes easy in life nor does the elusive ES 2200.00. With the Nasdaq hitting new all time highs, the Russell 2000 on 52 week highs, and all 10 S&P sectors trading higher, ‘Turn Around Tuesday’ was in full effect. After a 6 handle gap higher off the 8:30 CT futures open the (ESU16:CME) futures started running buy stops above 2185 up to 2191.50 in the early goings.

The day had all the makings of new all time highs and then the S&P backed off. There was an initial sell off to the vwap at 2188.50 and then down to the low of the day at 2185.50. Late in the day the ES short covered back up to the vwap and then traded to a new low at 2184.50. While there was an early Turn Around Tuesday trade and push to the all time highs, the S&P did give up part of its early gains and never re-established them.

 

CL (1)

Iran Gets Back In The Act

The big show was over in the crude oil futures markets. In the early goings the (CLQ16:NYM) sold off to an early low of $46.60. The headline algos started pushing prices higher as the OPEC headlines hit the tape saying Iran was ready to cooperate with other nations. Oil exploded up to $49.06 and then started breaking down in all the way back down to $46.61. It was an explosive day in the energy markets that never stopped all day.

The ES continued to fade out going into the 2:45 cash imbalance with the MiM (MrTopStep Imbalance Meter) showing over $400 million to sell on the close. On the 3:00 cash close the MOC showed 250 million to sell, and on the 3:15 futures close the ES settled at 2185.25 , up 3.75 handles, or +0.16% on the day. In the end all we can say is that the ES faded out but didn’t go very far.

Euro Session Gains

Overnight equity markets in Asia were weak. The ESU6 made a 2180.75 low late in the Asian session but rallied after the Euro open up to a globex high of 2187.75. Currently the ES is trading just 5 ticks from that high, up 1.25 handles on the day. Since the June 27th Brexit low the ESU has grinded higher. However, it’s gains have come from the Euro session, as the cash session is actually lower over that time frame. Today looks like more of the same, support at 2182, resistance at 2188 and 2191.

In Asia, 7 out of 11 markets closed lower (Shanghai -0.12%), and in Europe 10 out of 12 markets are trading higher this morning (DAX +0.28%). Today’s economic calendar includes MBA Mortgage Applications, FHFA House Price Index, Existing Home Sales, EIA Petroleum Status Report, a 2-Yr FRN Note Auction, and a 5-Yr Note Auction.

ES 2191.50 Rejection 

Our view: When the idiots on CNBC all start talking about ES 2200 you probably should take a step back. Yes, the S&P is still going higher. Yes, there are more stops to run, but if you take the average daily up day of 5 handles, yesterday’s early rally exceeded the current norm.

As always, please use protective buy and sell stops when trading futures and options.

Danny Riley is a 34-year veteran of the trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.

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EuroIMPRO

    • In Asia 7 out of 11 markets closed lower: Shanghai Comp -0.12%, Hang Seng -0.77, Nikkei +0.61%
    • In Europe 10 out of 12 markets are trading higher: CAC +0.45%, DAX +0.28%, FTSE -0.19% at 6:00am ET
    • Fair Value: S&P-2.13, NASDAQ -0.11, Dow -22.74
    • Total Volume: 1.12mil ESU and 3k SPU traded

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