Market Review
S&P 500 Futures Recap – Trade Date July 7, 2021
Economic Calendar
Closing Prices
In the TradeChat Room
Market On Close : Another buy on weak price action
Check out all the Market Closing action in our daily post
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
.
SpyGate: Sell the AM, buy the PM
Check out our Daily SpyGate Post
SpyGate is now available free to members of IMPRO and MIM trading room. Join the MiM.
Baxter: Shooting around the target
Baxter is our emerging AI product. As we build out our datasets and refine, we will begin tracking real-world AI market predictions. Today’s OHLC prediction is influenced by temporal data (Day of week, year ..) and the OPEX cycle. Baxter is not very smart yet, but he should get better. Here is what he thinks will happen today. This is SPX index, not futures. You will need to add today’s fair value (-8.93) to the data to adjust.
We will also get better at presenting Baxter’s thoughts.
We are retraining Baxter on predicting opening gaps better and a new version that runs post-open to re-predict the highs and lows. That will be a couple of more days. We are also working on calling the hour for the high and the low of the day so we can predict the day as OHLC or OLHC sequence. If you have ideas we would love to hear them!
Chart of the Day
Over-the-counter U.S. stocks point to fading speculation
Speculation in U.S. over-the-counter stocks appears to be fading, according to Maneesh Deshpande, a strategist at Barclays Plc. He cited the performance of the OTCQX and OTCQB composite indexes, consisting of companies that aren’t listed on the New York Stock Exchange or the Nasdaq Stock Market, in a report Tuesday. The OTCQX set a record on June 14 and then dropped as much as 4.3% through Tuesday, according to data compiled by Bloomberg. The OTCQB peaked on Feb. 16 and then fell as much as 20%. “Further pain is likely” in OTC shares as well as meme stocks and cryptocurrencies, Deshpande wrote.
Our View
Waking Up to Some Pain as S&P, Nasdaq Dump 1.5%
Tuesday morning started off with a break lower and it took several hours to bottom. Wednesday also started off with a dip, but like it has been the case for the last few weeks, dip-buyers were rewarded. This time much earlier.
The ES opened at 4342.25 and shed 22 points as it hit a low about one hour into the session. The bounce sent us all the way up to a high of 4350 ahead of the Fed minutes release at 2:00 pm ET.
4350 was an “obvious” high for its round number and for the fact that the ES had continuously been topping out around 4348. Post-Fed was pretty uneventful, with the ES doing a quick stop-run to 4353.25, but failing to gain any meaningful traction over 4350.
Overnight, the ES shed about 10 points, but it wasn’t until about 1:30 a.m. ET when things really started to break down. As I see it now, the ES is down 73 points from peak to trough, with the latter coming into play at 4280.25 as of 7:00 a.m. ET.
The Fed is talking about talking about tapering, which, while they remain very accommodative, is not something the market wants to hear. The rest of the talk — economic recovery speed, the state of emergency in Japan for the Olympics, etc. — just sounds like an excuse.
The state of emergency was pretty well telegraphed before and doesn’t really change where we are. The economy is recovering fine and nothing about that changed in the last 8 hours. The Fed’s talk is what I think is weighing the most — not that what I think or the reasoning of the dip really matters.
What matters is the price action and right now, the ES is pushing for caution.
Our View: This morning the NQ gave us a perfect dip down to the 10-day moving average, which was called out in the MiM chat room. While that mark may be retested during regular trading hours, it provided a nice 70-handle bounce. That’s $1,400 per contract — not bad considering there’s still time to go out for breakfast.
The ES is down to the 10-day moving average, too, but is below it as of this moment.
We have been trained to buy the dip because that’s what has worked so well this year. With the low summer volumes combined with the poor breadth this week though, any dip buys — like this morning’s NQ trade — will have a short leash.
If these losses are carried into the regular-hours trading session, I expect them to buy the dip this morning. As for the afternoon though? It’s anyone’s guess.
As we all know, there’s no crystal ball when it comes to trading stocks, options, or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk-free for 30 days.
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
No responses yet