The Asian markets closed modestly higher and Europe is trading modestly lower. Yesterday it was ECB rates and today is the jobs report. We don’t know why it was so slow yesterday, but we’re guessing it’s this morning’s non-farm payrolls number.
Risk on / risk off
Clearly the trade has slowed again and you can see it in yesterday’s volume in the ESU (CME e-mini S&P) — 1.25 mil contracts. The ESU’s volume is even lower when you take out the 240k traded on Globex. After the initial run-up the S&P sold off 6.3 handles and basically stayed in a 2 or 3 handle range for several hours. While the S&P’s were meandering, the bonds continued to get pummeled. There was also some big selling in the Eurodollar futures and that some of the trades put up was Pimco. While it’s slow now, it’s not going to stay that way. On Sept. 9 Congress goes back into session and there are all sorts of big events ahead.
Our view: The S&P has been going up but that does not mean it can’t or won’t turn on a dime, and that is what the public is scared about. We lean to a lower than expected jobs number and for the first part of the day we lean to selling rallies. Yesterday we put out our resistance at the 1655 to 1660 level and the high was 1658. We also put out the trendline that comes in at 1625.50.
As always, keep an eye on the 10-handle rule and please use stops when trading futures.
- In Asia, 8 of 11 markets closed higher (Hang Seng +0.10%, Shanghai Comp. +0.83%, Nikkei +0.16%).
- In Europe, 7 of 12 markets are trading lower (DAX -0.16%, FTSE -0.10%)
- Morning headline: Global Stock Markets Quiet In Front of US Jobs Report
- Total volume: 1.25 million ESU and 4k SPU (mostly ETFs) traded
- Economic calendar: Charles Evans speaks, Employment situation, Esther George speaks.
- MrTopStep Closing Print Video