Market Review
The ES traded down to 4522.50 on Globex and opened Monday’s regular session at 4548.25. The S&P got a boost from TSLA, which surged $115.18 or +13% to $1,024.86, closing at an all-time high when the company reported an order from Hertz for 100,000 new vehicles from the electric vehicle maker to restock its rental-car fleet. Tesla’s market cap jumped to over $1 trillion with Monday’s rally.
After the open, the ES sold off down to 4528.75 at 9:42 and that is when the buy programs started hitting. I am not going to do all the higher lows and higher highs because there were just too many. At 1:30, the ES made its early high for the day at 4564.00, up 41.5 points off the Globex low and up 23 points from the open. The ES pulled back down to 4557 and then rallied back up to the high at 4564, pulled back a little down to the 4556 area at 3:38 as the MIM showed $534 million to sell. The ES traded 4559.50 as the 3:50 cash imbalance showed $1.3 billion to buy and traded 4560 on the 4:00 cash close. After 4:00, the ES rallied up to a new high at 4566.25 and settled at 4565.25 on the 5:00 futures close, up 36 points or 0.79% on the day. Earnings from Facebook helped drive the late-day rally.
In the end, the ES pulled off another higher close, up 8 of the last 9 sessions. And keep in mind, the one “down” day in that stretch was a loss of just 12 basis points.
In terms of the ES’s overall tone, it was firm all day. In terms of the ES’s overall trade, total volume was extra low at 978,000 contracts, pretty much in line with the declining volume of the last 3 or 4 sessions.
Economic Calendar
Closing Prices
In the TradeChat Room
Market On Close: Three $1B MOCs in a row. Less enthusiasm.
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MOC for the month so far:
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SpyGate: Quiet day. Bots tried to sell the close early but market still too strong on the upside.
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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: ~14:35
09:30 – 10:00 38% (wrong).
15:30 – 16:00 44% (wrong).
Low: ~09:40
12:00 – 15:30 >90% (wrong)
Today:
High:
09:30 – 10:00 >90%
Low:
09:30 – 10:00 51%
15:30 – 16:00 36%
Baxter had three strikes yesterday. All the price movement was in the morning hours counter to his bias of highs and lows in the afternoon. Today again the high around the open and low in the first or last 30 minutes.
Chart of the Day
Trump creates meme world by making media deal with SPAC
Why settle for one meme stock when there can be five? The question arises from former President Donald Trump’s decision to combine a media business with Digital World Acquisition Corp., a special-purpose acquisition company. Digital World, led by Chief Executive Officer Patrick Orlando, soared as much as 17-fold on Thursday and Friday. Phunware Inc., a software maker that worked on Trump’s re-election campaign, rose even more. Benessere Capital Acquisition Corp., another SPAC run by Orlando, climbed Friday by as much as 87%. Two other SPACs with ties to him, Yunhong International and Maquia Capital Acquisition Corp., had short-lived rallies Friday.
Our View
The PitBull used to subscribe to a lot of newsletters, but now it’s down to 3 or 4. Of the 4 market timers, 3 have been totally wrong while the one that did call it right hedged his positions. The public has been brainwashed into this or that, thinking this is going to be really bad for the markets. The ES is up and a few days before the news people start selling but it doesn’t go down. Finally the new is out and the ES sells off a little but comes flying back up.
Picking tops is the hardest trade you can make. The win percentage has been low over many years thanks to all the massive QE. If we all had our heads on straight we would avoid using the word sell. I am not saying the selloffs can’t get harsh but you know what? It always ends up being the same thing… a new high eventually follows. As of yesterday’s close, the ES made another new all-time record close. What we have to be prepared to do is buy the ES when it drops. I am not going to go crazy on my year-end call — which I raised to 4750 — but my gut tells me this rocketship could blast off again any day.
Our Lean: The next level on the ES is 4580 and if it holds above there it should target 4620. Like I said above, this rocketship is in take-off mode and going a lot higher. Clearly, the lower volumes are creating a ‘thin to win’ environment!
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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