S&P 500 Futures Recap – Trade Date February 24, 2021
S&P 500 Futures: 123 Handle Rally In 2 Days
After trading in a 44.75-handle overnight range, the S&P 500 futures opened Wednesday’s cash session at 3866.00 and would go on to trade the daily low of 3855.50 in the opening hour, drawing in buyers that would bid equities higher throughout the morning to a 3915.50 late-morning high. The noon hour would see a 10.50-handle pullback before resuming the rally, grinding higher throughout the afternoon up to the 3927.50 high of day, a 72-handle rally from the early low. The S&Ps settled at 3926.50, up 51.25 handles on total volume of 1.89 million contracts traded. In terms of price action, it was all about buying the low just after 9:00 CT and holding to cover just before the daily settlement.
In the Tradechat Room
MiM & SpyGate
The early MIM was showing a decent sell right into the 15:50 reveal which had a surprise upside reveal, not much lean but the directionsl change was enought to put in a 5-point 15:50 reveal candle which sold back off once the Dquotes were revealed.
LAST CHANCE TO JOIN THE MIM AT 2020 PRICES. We need to raise our subscriptions prices for 2021 to cover the increased data fees. Why do internet and computers get cheaper and cheaper but data more expensive? To be grandfathered in for 2021 you need to purchase by the end of the month which is this Sunday! Don’t miss out.
As a whole, the US continues to improve in dropping daily cases.
Our end of the week look at vaccines around the world. Isreal continues to lead at vaccinating with a daily 1.4% of the population getting a jab every single day. The US has slipped from a hight of 0.5% down to about 0.4%. Weather is being blamed. Next week increased availability along with backlog should have the US seeing some pretty impressive numbers if the distribution system is working.
That single dose is very important in helping the severity and transmission of the disease. We are just begging to understand the transmission rates of vaccinated individuals and it is looking pretty impressive. The “Don’t hug your grandchildren even if vaccinated” might be lifted.
Better than a single jab is a double jab with Israel now having almost 40% of the country vaccinated. Israel is making plans to use electronic passport requirements for a re-opening of the country.
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
Don’t Be Cute;Buy The Dip
I for one am not surprised. I am not surprised that the index markets sold off and I am not surprised that they ripped higher, either. You don’t need a fancy computer or indicator to tell you that as long as the government is supplying endless liquidity and the fed keeps rates at zero that when the markets do drop you don’t forget, it’s a dip buyers market. I am no different than you, I also think the markets are up too much and that a ‘set back’ could happen at any time but with $1.9 trillion in stimulus being added the prospects of any major down move is probably not currently in the cards. With the fed vowing to support the labor market and lower numbers of coronavirus cases, everything is pointing in one direction, a US economic recovery.
After a 6-day decline in the S&P and Nasdaq, investors are piling back into growth stocks. As of yesterday, major U.S. stock indexes have set 32 record highs in 2021, including Wednesday’s 424-point surge by the Dow industrials to 31962. The Dow has closed up 7 out of the last 8 sessions and is outperforming the S&P in February. The Dow Jones Transports also posted a new all-time high. As the US emerges from the pandemic, many Americans will start spending more on everything from weddings to new electric cars to vacations.
Let’s face it, investors are flush with cash and are deploying money into the stock market. While it is sometimes hard to see with all the rotation, money now moves faster than it ever has. Adding to the inflow in stocks is the recent bond crash. Will this rally go on forever? No, it won’t, but for now, it’s all about one thing; DON’T FIGHT THE FED!
Our view, the ES traded down to 3855.50 during yesterday’s day session at 10:11 ET and rallied up to 3934.50 on Globex around 7:00 PM. That means the ES rallied 88 handles in 9 hours or a nearly 10-handle gain per hour. I said yesterday that the ES was going to new highs and it is. Our lean, you have two options, you can sell the early rallies or gap up open and buy the pullback or you can just sit on your hands and BUY THE DIP!
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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