S&P 500 Futures Recap – Trade Date January 29, 2021
In The Negative for 2021
After trading in a 55.75-handle overnight range, the S&P 500 futures opened Friday’s cash session at 3760.00, traded a daily high of 3770.25 just after 9:30CT and then sold off through the morning down to a 3685.50 low just after noon. From there, buyers would lift the S&Ps during much of the early afternoon up to 3735.00 just after 2:30 and then late day selling pushed the index back down to 3695.50 before settling at 3701.00, down 78.25 handles on impressive volume of 2.6 million contracts. In terms of price action, it was all about buying the 9:30 high and buying the 12:00 low.
In the Tradechat Room
A negative MIM on the 15:50 MOC with about 500M to sell. We had been showing a decent buy and the market was reacting to the early buy signal but at 15:35 it turned negative and down we went into the reveal which was taken as neutral and the Friday close sell-off started and the buy the close for the weekend proved once again the trade to take.
The number of covid victims hospitalized continues to fall at a nice rate as we work through the end of the year wave. Still not seeing a new wave building anywhere although the rate of falling has pretty much eased off in all the large states. Most states are starting to ease their restrictions and open back up.
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
Rejection / Correction
I’m going to make this short and sweet.
There are several reasons for the current downdraft in the stock market right now. The first is how overextended the stock market is, the second reason for the weakness is the reliability issue of the Covid-19 vaccines, the third part is GameStop Corp and AMC Entertainment Holdings Inc which is now spreading to other assets, and the final part is President Biden’s over 40 executive orders, undoing many of the Trump administration’s actions. I’m sure some people don’t believe it but the economy is ‘feeling out’ the new administration’s policies and clearly, the $1.9 trillion stimulus package is being viewed with skepticism.
The PitBull saw this sell-off coming over a week ago and I didn’t listen. He totally nailed it. All I had to do was get short and go fishing but I continued to buy weakness and got run over. I had several opportunities to sell at the 3850 area and didn’t and I paid the price.
Our view, the ES is trading 2703.50, up 48 points off the 3656.50 Globex low. My guess is we see a larger bounce today. Sell the early rallies and buy weakness.
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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