S&P 500 Futures: Rebalancing ES/NQ Close Higher While YM/RTY Close Lower
After trading in a 21.75 handle overnight range, the S&P 500 futures opened Wednesday’s cash session at 3691.00, up 6.00 handles, traded to a 3681.25 low of day in the first half-hour, and then rallied up to a morning high of 3696.25 just before 11:00 CT. From there, the ES would drop lower in the noon hour, falling back down to 3683.00 for an afternoon low just before 1:30.
From there, buying would come in to push the S&Ps up to a 3704.50 high late in the session before settling the session at 3694.25, up 7.75 handles or +0.20%.
In terms of the overall price action, it was all about selling the early low before 9:00 and then the early afternoon low at 1:30. In terms of the day’s overall trade, volume was 1.47 million.
In the Tradechat Room
A nice 1.5B sell imbalance hit the 15:50 candle and we did a nice 5 point selloff. Expecting some larger MOCS today and tomorrow.
If you are doing early voting in GA, do not stand in any line that is longer than 5 minutes and keep a safe 10 to 12 feet behind the person in front of you no matter if someone behinds you gets annoyed. Let them know why you need the distance.
Wear your masks! Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line) Stay home! Take your Vitamin D!
GMTT – Chart of The Day – Gold / December 17, 2020
We are showing today once more an updated Gold chart. As explained previously Gold bottomed around 1764 and that is when we went initially long. Then in between, we got stopped out and went long again at 1835. On the last chart, we showed that Gold was very close to breaking out and gave a next upside target of 1883. This morning Gold reached our target and we now need to see if it can maintain its up-move. We need a close above 1901 to see a move above 2000. Raise the Suggested protective sell stop to 1868. For GLD the next upside target is still 177.40 and we raise the suggested sell stop to 171.90.
On another note: Bitcoin…
From our GMTT Research report of December 7th (full copy available on request):
Bitcoin (BTC/USD) Bitcoin reached another milestone – our upside target of 20000. A good close above it will confirm a move towards 26K. However, we expect to see a pullback first. Now looking to short Bitcoin at the market with a buy stop at 20045. First short-term downside target 18220.
Bitcoin did pullback to 17575 before it continued its up-move. Above 20000 it confirmed the move towards 26000, and this morning Bitcoin is already trading at 22582!! The trading in the Bitcoin remains very volatile which is the reason that GMTT is not invested in Bitcoin now. A close below 20800 cancels the buy signal short term.
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Bitcoin 21,417.20 / ES 3705
The stock market is on all-time highs. The Russell 2000 is up 100% from its March 18th low and the Nasdaq is up 40% YTD. The fed plans on doing open-ended stimulus and said rates will remain low. Bitcoin, that no one has really taken seriously. is 21,417 and lawmakers say they are close to a stimulus deal that is a $900 billion package that features payments to households and $300 a week in enhanced unemployment insurance among other measures. After months of stalling, the agreement represents a breakthrough at the height of the pandemic. The weak retail sales numbers show the economy slowing as Covid19 cases are skyrocketing. Yesterday, California reached a record 1.5 million reported covid cases. How is it possible the stock market can continue to overlook Covid19 ‘mega spread’ and hospital bed shortages? Late last night I saw a headline that New York State lawmakers are weighing tax increases on the rich. Yes, the vaccine is now being distributed but it will be months before it’s available to the general public. That all said, life goes on and the stock market has gone higher nearly every day for a month and a half. Who the hell wants to get in the way of that?
I think it’s 100% OK to be skeptical. I remember back in March I talked to my Vanguard advisor and asked him if I should start buying energy and tech. He said Vanguard was looking for much smaller gains than last year. Get your shit together people. The U.S government and the Federal Reserve are going to print so much money it’s going to scare you! But that money is going to push the index markets higher just like the quantitative easing programs bid during the credit crisis. Hell yes, there will be sell-offs and pullbacks but at some point, the decline will be bought. Are we there yet? No, but we could be in a few days when TSLA joins the S&P. I wrote about this two weeks ago. Friday is the Dec Quad Witch and the big ETF and mutual funds will start adjusting to TSLA. On November 17th the stock was trading under $450 and on Tuesday, December 8 it traded up to $650 in 16 sessions.
Our view, you can sell the higher open or the first rally above the open and buy the early low that has been coming in the first 30 to 40 minutes and get long and look for a push higher. It’s been all clear sailing and Friday’s expo stats are positive but there could be a big MOC sell on the close tied to TSLA.
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.
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.