Market Review: Danny Riley (Dboy)


S&P 500 Futures: Don’t Trade What You Don’t Understand

I know some people will say this is hogwash but when the headline hit midmorning yesterday that the Global Times was reporting that China was likely to have a vaccine for the coronavirus within the next three months and the ES was rallying so much on Globex Monday night, all I could think of were the words ‘front run’. You can say whatever you like, but how does the S&P go from looking horrible, bad headline after bad headline, closing down 1.6% yesterday and without one good piece of news be up 1.2% at 1:15? I do not know who they are but someone had to know something.

After trading down to 3238.75 on Globex Monday night the ES rallied all the way up to  3265.75 yesterday morning and traded 3257.25 on the 8:30 CT futures open, up 27 handles on the day. After a small pullback down to 3251.75, the ES got hit by several buy programs and then traded up to the 3275.00 area, pulled back a few handles and traded up to the 3277 area. After a pullback down to the 3272 area, the ES rallied 10 handles up to a new daily high at 3282.25 around 1:15 CT. After the high, the ES pulled back down to the 3279.50 area, back and filled a bit then rallied up to new highs at 3285.00, up 44.25 handles or 1.35%. 

At 2:00 pm CT, the ES traded 3281.00 and the early MiM showed $100 million to sell. The ES then traded down to the 3278.00 level, traded 3283.50 at 2:30 and the MiM increased to $800 million to sell, and the ES traded 3279.50. At the 2:50 cash, the imbalance showed up big with $3.1 billion for sale. The ES traded 3275.25 on the 3:00 cash close and settled at 3277.25 on the 3:15 futures close, up 36.5 handles or +1.13% on the day. 

In terms of the ES’s overall tone, it acted very firmly but most of the buying was the shorts getting squeezed out. In terms of the day’s overall trade, volume was high 1.8  million futures traded. 

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Danny Riley (3473 Posts)

Danny Riley has worked in the futures and options industry for 38 years, including the CBOT’s bond room, where he worked for several of the Market Wizards. He went on to build the largest volume desk in the S&P 500 Index Futures, serving some of the largest banks and hedge funds, the UBS program trading business, and some of the world's top individual traders. As a leader and co-creator of the MrTopStep IM-Pro Trading Room, he shares trading ideas and breaking market news live from the floor with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.

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