S&P 500 futures Recap – Trade Date February 26, 2021
S&P 500 Futures: February Ends At the Lows
After trading in a 46.75-handle overnight range, the S&P 500 futures opened Friday’s regular session at 3846.50, traded an early morning high of 3851.75 in the first fifteen minutes, and then reversed to sell off thru the first hour, pushing down to the daily low of 3785.00, a 66.75-handle reversal. Buyers would enter going into 9:30 CT pushing the ES back up to the open, eventually printing a 3858.50 daily high just before 11:30. The S&Ps would then slide through the rest of the morning, noon hour and into the early afternoon making a higher low of 3812.50 around 1:30 and would then rally to a lower high of 3850.75 just after 2:30 before late-day selling flushed equities lower down to 3790.00 before settling at 3802.25, down 29.25 handles on huge volume just missing 2.9 million contracts traded. In terms of price action, it was all about trading the range, selling the open, buying the 9:30 low.
In the end, it was the worst day for the S&P 500 in February, and the worst for the recently leading small-cap Russell 2000 since June of last year. Meanwhile, the tech outflow continued as the Nasdaq closed in negative territory for the year, just beneath the key 12,900 level we mentioned earlier this week.
In the Tradechat Room
MiM & SpyGate
A decent sell and market reaction as a surprise 2.5B sell slipped in just at the 15:50 reveal deadline, creating a decent 20+ point drop on the new data. This is the lesson of trading the close if you don’t have information. A full day of trading could be lost in a few seconds.
The US continues to worsen after several weeks of progress. On Friday we had 8 states where cases were rising and today it is 18. That is an increase of 10 over the weekend.
The rise right now is a slight tick up but a thrird wave of a more virulent version could slow down the vaccination campaign.
Daily tests are showing a concern as an early indication of more to come.
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 – Crude – March 1, 2021
The direction is not clear, and Crude never gave a good sell signal. Short term upside target is 64.80. There are three trading options to choose from today: To see if Crude can reach 64.80 and then go short. To go short at the market with either a tight buy stop or a wider buy stop around 64.80. To wait until Crude confirms a sell signal which is below 60.85. It is risky being either short or long and for now we wait until we get either confirmation.
GMTT publishes three weekly its GMTT research report covering the following: Global Indices, VIX, a selection of stocks, Treasury Bond, Commodities, Soft Commodities, Currencies, and Bitcoin.
It’s been a wild ride down in the stock market over the last two weeks and it was capped off with $2.5 billion to sell on the close as part of last Friday’s end of the month rebalance. Many times when you get a ‘sell’ at the end of the month the big investment firms buy stocks on the first few days of the new month. After Friday’s 2% loss, the S&P and Dow are up less than 2% on the year. This week, Target, Zoom and Costco report earnings and the February jobs report is on Friday. Economists are expecting to see non-farm payrolls rose by 150,000 in February, accelerating from the tepid gain of 49,000 a month earlier and the continued push by the Biden administration to get the $1.9 trillion stimulus package approved.
Our view, it’s 6:00 am and the ES traded up to 3857, up 47.75 points. Basically, after 2 weeks of selling off the ES is only 102 points off its all-time contract high. If the bonds are firm my guess is we continue up but not necessarily straight up. Buy the pullbacks, 3885 is on tap and above that I see 3920 coming this week.
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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