S&P 500 Futures Recap – Trade Date January 13, 2021
S&P 500 Futures: NQ/ES Up and YM/RTY Lower
After trading in a 28.50 handle overnight range, the S&P 500 futures opened Wednesday’s cash session at 3791.25 and traded down to a daily low of 3782.75 in the first hour before reversing to rally up to a morning high of 3808 just before noon. The early afternoon would see a sideways trade before marching up to the daily high of 3813.50 just before 1:30. Then the S&Ps would trade down to an afternoon low of 3800.75 before settling at 3805.75, up 11.25 handles on a total volume of just over one million. In terms of price action, it was all about buying the early morning low and selling the early morning high.
In the Tradechat Room
MiM started off strong at 14:00 with a decent 67# buy lean showing and the market liked it. That built to a high of 708M at 14:30 (not on the table above) but by14:50 time it was beginning to pair off and the markets followed. The MOC was really 0 for the NYSE and slightly negative for the NQ with no real lean at all. The 15:50 candle had very little volume. We are starting to head into OPEX which will be swinging our MOCs around for the next three trading days.
Better looking today than yesterday for the US. Now less than half the states have rising numbers of new cases. While most have hit the stable level we want to see that falling number light up. There are just five states in that category right now.
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 – US 30 Year Treasury Bond – Jan 14, 2021
This forecast/outlook is a copy from yesterday’s GMTT Research Report. To see a full copy please click on the below link and it will be emailed to you.
US Bonds (MAR)
The US Bonds reached their next downside target and TLT came very near to it too. Since we expect at least a bounce we suggest closing any short positions and to go long: US 30 Year reached our next downside target 167.57. We suggest long with a sell stop at 166.54. US 10 Year reached our next downside target 136.17. We suggest long with a sell stop at 135.49 TLT came close to our next downside target 149.15. Suggest long with a sell stop at 147.00.
Keep the protective sell stop at 176.20, but only a good close end of day cancels the buy signal.
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January Mid-Month Rebalance
Over 30 years ago the PitBull taught me about something called the mid-month rebalance. The trick to it is that the rebalance doesn’t fall on the 15th, it falls on the 14th. As we all know, no one can predict what the ES is going to do but what I do know is that the mid-month rebalance tends to be an up day. Like Monday and Tuesday, the ES did pull back yesterday but the decline was smaller. Right after the early low the ES ‘caught a bid’ and rallied 30 handles. Last night the ES could not have looked better when it rallied up to 3817.75 and at 6:00 am this morning it is trading 3808.25, up 4 handles.
Our view, despite the democratic impeachment of President Trump yesterday, the Biden administration is set to unveil its new stimulus proposal today. The question swirling around this morning is will the impeachment proceedings impact the Biden agenda? I guess it’s just another day in the life of our government. Our lean is the same as yesterday, you can sell the early rallies and buy the pullback or just be patient and buy the dip. 3830 on TAP!
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.
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