Market Review
The S&P 500 futures have racked up six higher closes in a row and show no sign of retreating. After trading down to 4504 on Globex, the ES opened Wednesday’s regular session near 4516 and the bulls got to doing what they do best: jamming the ES higher.
The bulls bid the ES up to 4530 in the first hour of trading, but this level would become resistance after the early morning push. While the ES did climb to a high of 4532.25 at 10:30, the ES ultimately couldn’t penetrate this area.
After a 10-point dip, the ES tried to push through the 4530 area again and failed, this time retreating to a low of 4515. Following the bounce, the ES closed at 4529.75 at 4:00 pm and settled at 4525 at 5:00 pm.
In terms of the ES’s overall tone, it was firm most of the day. In terms of the day’s overall trade, volumes was low at 966,180 contracts traded.
Economic Calendar
Closing Prices
In the TradeChat Room
Market On Close: About $400M to sell, no real lean.
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SpyGate: Large sell program at 13:01 rocked the boat.
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Baxter
Baxter is our new AI trading helper. This data is early, new, and not very well tested but we want to share some of our findings. We are concentrating on the SP500 which should benefit ES futures and SPY traders.
Last Trading Day:
High: ~10:30
09:30 – 10:00 > 90% (wrong).
Low: ~09:30 (open) ~13:20 (double bottom)
09:30 – 10: 00 ~50% (right)
15:30 – 16:00 ~40% (wrong)
12:00 – 15:30 ~10% (right)
Today:
High:
09:30 – 10:00 > 90%
Low:
10:00 – 12:00 37%
12:00 – 15:30 63%
Chart of the Day
P&G and peers are pounded down to 20-year relative lows
Procter & Gamble Co.’s outlook caused makers of food, beverages, tobacco and household products to fall further out of favor. P&G dropped 1.2% Tuesday after raising a fiscal-year estimate of costs related to higher commodity prices and freight rates by 21%, to $2.3 billion. The stock’s decline helped send the S&P 500 Consumer Staples Index to its lowest level relative to the U.S. equity benchmark since January 2001. The ratio between the indexes declined 32% through Tuesday from a peak in March 2020, according to data compiled by Bloomberg.
Our View
The S&P has a new friend, Bitcoin. Yesterday Bitcoin made a new all-time high and is up 50% in a month. The risk-on approach with cryptocurrencies is helping give a risk-on nudge in equities, too.
Right now the positive earnings are overshadowing the supply chain and inflation problems. I am sticking with my call from yesterday. Sell a higher open or sell the rallies. If the ES is weak late Thursday, I may try a long, but I think the ES needs to flush, run some sell stops and knock out some weak longs first.
Danny Riley is a 39-year veteran of the CME trading floor. He ran one of the largest S&P desks on the floor of the CME Group since 1985.
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