|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3914.50||Opening Print: 3873.25|
|Low: 3861.25||High 3899.25|
|Volume: 195K||Low: 3870.00|
|ES Settlement 3875.25|
|Total Volume 1.3M|
S&P 500 Futures Recap – Trade Date February 22, 2021
S&P 500 Futures: Five Day Losing Streak
After trading in a 53.25-handle overnight range, the S&P 500 futures opened Monday’s cash session at 3873.25 and during the opening minutes traded to the morning low of 3873.00 before rallying to an early morning high of 3888.75 just after 9:00 CT. Then, after a 3817.00 lower high just after 10:00, the S&P futures began to rally through the remainder of the morning into the noon hour reaching the daily high of 3899.25 just before 1:00. The remainder of the afternoon saw a lower move down to 3872.00 in the final hour before settling at 3898.50, down 23.25 handles on modest volume of 1.3 million contracts traded. In terms of price action, it was all about buying the open and then reversing to short the noon high, covering late day.
The rotation out of technology continued during yesterday’s “mutual fund” Monday and the Nasdaq closed down by 2.5%, meanwhile, the smallcap Russell 2000 continues to be the equity leader being up over the most recent four sessions.
In the Tradechat Room
MiM & SpyGate
Monday’s MIM was a nice sell. Our early MiM showed a reasoanable sell and the market just slid from an attempted rally into the close into a 25-point ES slide with the MIM marching ever more negative into the reveal. Naz was a heavy sell, but the broader NYSE was actually not so bad. Tech profit taking is underway.
Questions? Please email me: Marlin@mrtopstep.com
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 now.
Get the skinny when we get it: Join the MiM.
As a whole the US continues to improve in dropping daily cases.
Wyoming has an upturn. It is too early to say we are not going to get a spring fling as the vaccinations continue to crawl out and the more virulent strains begin to take over. Watch Wyoming for how we build.
Wear your masks!
Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line)
Take your Vitamin D!
Chart of the Day
Energy stocks and Treasury securities are sending similar signals about the U.S. inflation outlook, according to Michael Hartnett, Bank of America Corp.’s chief global investment strategist. He cited gains among “energy laggards,” specifically Occidental Petroleum Corp., and higher Treasury yields in a report Friday. The chart makes a wider comparison between the S&P 500 Energy Index and the yield on 10-year notes, which have both worked their way higher since March. “Trends say higher inflation,” Hartnett wrote, and commodities and other real assets are reaping the benefits.
Rotten Wood Floating Around In The Stock Market
Before the word ‘subprime’ was used in the 2008 credit crisis, the Pit Bull told me that there was rotten wood floating around in the stock market, the banks and brokerages stocks. Over the next few months, I watched the S&P drop approximately 20% by mid-2008 and 50% during the bear market. I am not saying the the S&P is going to drop 50% but there is a high level of complacency and over-exuberance. When I look at this decline the only thing I can think of is when the Pit Bull told me over and over the last month that the rally was not sustainable with 62% bulls.
It’s 5:30 am ET and the ES that closed at 3875.25 and rallied up to 3896.25 just traded down to 3840.00, 56.25 points off the Globex high. The move out of tech and the move from grown stocks to value stocks, bond prices down and yields up have weighed on the markets with the S&P closing down 5 sessions in a row and possibly 6 in a row.
The economy is opening up with the GOAT stocks ( get up and go stocks) cruise line stock is jumping and Las Vegas is almost totally booked. I still think it’s going to take a year or more to fully open up the economy but JP Morgan said the U.S economy will be stronger than the recovery in China coming out of the pandemic.
Our view, while inflationary, the jump in bonds yields is also saying the economy is starting to look forward. How is that going to help with the Nasdaq that’s down 4% over the last 5 sessions? It won’t, but I’m betting this decline won’t last much much longer. Our lean is to buy the gap down open or the early weakness and sell the rallies. The current drop in the S&P is the largest in a year.
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.