S&P 500 Futures Recap – Trade Date January 11, 2021
Bears Win First Two Mutual Fund Mondays of 2021
After trading in a 44.25 handle overnight range, the S&P 500 futures opened Monday’s cash session at 3782.75, then traded the daily low of 3781.00 in the initial minutes before heavy buy programs came in pushing the index futures higher throughout the early morning and up to 3810.50 just before 12:00. From there, the futures would trade lower in the afternoon, pushing down to 3785.50 for the afternoon low before settling at 3795.25 down 22.25 handles or -0.58% on total volume of 1.25 million. In terms of price action, it was all about buying the morning and selling the afternoon.
In the Tradechat Room
The closing trade was before the Reveal at 15:50 as the 15:45 candle took a nice ten point ride up. The reveal pushed higher only to find sellers as most of the imbalance was paired at the 15:55 Dquotes going into the close of the day.
The good news is that growth in daily new cases is slowing, the bad news is that the numbers remain high and continuing vigalance, staying at least 6 feet apart at all times and staying in secure bubbles, is needed until the coast is cleared. If this were the Boston marathon then we have hit Heartbreak HIll and the rest of the way will be a slog for sure.
Wear your masks! Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line) Stay home! Take your Vitamin D!
Chart of The Day
GMTT – chart of the day – EUR/USD – Jan 12, 2021
The Euro is on a sell signal and trading near its short-term downside target of 1.2150. A close below confirms a more significant down-move.
The Dollar Index finally made a bounce and is now close towards its firs short term upside target.
The Euro not surprising is very close to its short-term downside target.
However, to get a confirmed reversal i.e., a stronger Dollar we need to see a good close above 90.85.
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No matter the cause of yesterday’s decline the ES was overdue for a pull back. I am like everyone else, I think the markets have rallied enough to justify a pull-back / sell-off but I do not think it will be anything like a crash. A 2% or 3% would be a lot or for that matter even 3 lower closes would be a lot. In most cases uncertainty, which there is an abundance of, doesn’t seem to matter. Investors don’t care about Trump or record Covid19 levels. It’s all about zero interest rates and massive amounts of money flowing into stocks.
Our view, today is ‘turnaround Tuesday’ And my guess is for higher prices. You can sell the early rallies and buy the pull backs or just be patient and buy the dips. If the ES can close above 3812 or rally above and hold I think it could be a quick trip to 3850.
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.