S&P 500 Futures Recap – Trade Date January 6, 2021
New All Time Highs Fail To Hold Amid Capitol Takeover
After trading in a 49.25 handle overnight range, the S&P 500 futures opened Wednesday’s cash session at 3702.00, traded the daily low of 3695.75 in the initial minutes before heavy buy programs came in pushing the index futures higher throughout the morning up to 3770.50 just before noon, then to a daily high of 3774.50 during the noon hour.
The afternoon saw a sideways chop until events began to escalate at the U.S. Capital, triggering some selling down to 3730.00 for the afternoon low in the final minutes before rallying to settle at 3745.25 up 27.00 handles or +0.73% on volume of two million contracts. In terms of price action, it was all about buying the open and holding into the midday high then shorting as the ES began to rollover in the early afternoon, holding into late day.
In the Tradechat Room
Most of the close was about the news. A 1B buy on the NYSE was offset on the NQ with a decent sell, but none of it matters as news was breaking quickly from Washington DC. An action packed day.
Markets making new highs as Covid does also. This map looks pretty bleak but we are still working through holiday data and next week we should have a better picture. California contiues to slow but still adding 37K cases a day and 300 deaths.
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 oil – Jan 7, 2021
Crude finally broke out of its trading range and moved above $50 for the first time since February 2020. It remains the question of how much higher Crude will trade, and we prefer not to be long at this moment. As you can see on the chart the bounce gets cancelled again below 50.38. That would be the level that we will go short. We could be a little early and therefore suggest keeping a tight buy stop at 51.35.
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Sad Day For American Politics
I started to write about yesterday’s break in at ‘Capitol Hill’ but I erased it. All I can say is it was a very sad day for American politics. At 4:00 am this morning, Joe Biden was certified by congress as the next president of the United States. I am not going to do a big view today as there is not much to be said that we do not already know.
Our view, the ES was up 30 handles and sold off 10 handles after Biden’s certification. In all honesty, I am not sure what the markets want to do. What I can say is the ES has recovered most of Monday’s decline but I wonder if today will be a sell the news day. Our lean, sell the open or early rally and look for an early low to get long.
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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