This morning is going to see a big increase in economic/earnings reports and fed speak, with the highlight of the day being Federal Reserve Chair Janet Yellen’s welcoming remarks at a Fed conference on post-crisis monetary policy, in Washington. It was slow yesterday, but that’s not how it’s going to be today.
During the Veterans Holiday trade the S&P 500 futures travelled higher during the globex session, making a high of 2087.25 at 7:00 CT, before coming off into the cash open. When 2081.75 printed on the open, it looked like the ESZ wanted to trade higher and challenge the overnight Globex high, however, in came the early sell programs knocking the futures lower in the first hour of trade. The ESZ15:CME fell more than 10 handles from the open before bouncing more than 10 handles into midday. It looked like the low volume “thin-to-win” was going to lead the trade higher in the afternoon, but again seller’s kept offering into the final hour as the index futures made a new low just before the close. When all was settled the S&P closed at 2069.25, down 8 handles on the day, and 18 handles from the globex high.
There is a lot on the docket today, and it’s our guess that todays index trade picks up. Most of the things we look at say the ESZ is going to bottom over the next few days, but we also cannot rule out new lows today or tomorrow. I told the PitBull I think we bounce late this week, we rally next week, and the last trading days of November are down. According to Jeffrey Hirsch of Stock Trader’s Almanac “November opens strong, peaks around the fourth trading day, trades lower till the eighth trading day, bounces mid-month, moves sideways to lower during the week before Thanksgiving, then higher to close out the month with gains ranging from just under 1.5% for Russell 2000 to over 2% for DJIA”
I understand that as day traders we don’t always think about what the markets will be doing a week, or a month out, but I think longer term views are all part of how we read the markets overall. Having a forward looking view is the only way to trade the S&P or oil futures because simply said; yesterday’s news is, yesterday’s news.
In Asia 7 out of 11 markets closed higher ( Hang Seng +2.40%), and in Europe 9 out of 11 markets are trading lower (DAX -0.36%). Today’s economic calendar includes Jobless Claims, St Louis Federal Reserve Bank President James Bullard speech to Cato monetary policy conference, in Washington, Federal Reserve Chair Janet Yellen welcoming remarks at Fed conference on post-crisis monetary policy, in Washington, Richmond Federal Reserve Bank President Jeffrey Lacker on panel discussing monetary policy, in Washington, JOLTs, Chicago Federal Reserve Bank President Charles Evans speech on transforming communities, in Chicago, EIA Petroleum Status Report, 10 Yr TIPs, New York Federal Reserve Bank President William Dudley speech, in New York, 30 Yr Bond Auction, Treasury Budget, Money Supply, and Federal Reserve Vice Chair Stanley Fischer speech on transmission of exchange rates to output and inflation at Fed conference on post-crisis monetary policy, in Washington.
Yellen And Friends
Our View: We have a boat load of fed speak, and economic reports out this morning. Funny, yesterday we had nothing going on, and today is packed with market moving events, the algos are going to love it. That said, I think we are getting close to a bounce. Not sure if it starts today or tomorrow, but I think it’s coming. Will it be a low that takes us back to new highs? No, I don’t think so. The S&P needs some more dips and rips, and a little back and fill before that happens.
Get all of the November expiration stats here…
As always; please use protective buy and sell stops when trading futures and options.
Veterans Day Dip
- In Asia 7 out of 11 markets closed higher : Shanghai Comp. -0.48%, Hang Seng +2.40%, Nikkei +0.03%.
- In Europe 9 out of 12 markets are trading lower : CAC -0.81%, DAX -0.36%, FTSE -0.53% at 6:00am CT
- Fair Value: S&P -4.22, NASDAQ -4.68 , Dow -55.07
- Total Volume: 1.16mil ESZ and k SPZ
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