Market Review
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3449.00 | Opening Print: 3446.75 |
| Low: 3436.75 | High 3481.00 |
| Volume: 218,000 | Low: 3441.00 |
| ES Settlement 3480.25 | |
| Total Volume 1.2 Milliion |
S&P 500 RECAP – Trade Date 08/26/ 2020
#ES Money Maker Chart
‘Crushing New Highs’
After a sideways trade overnight, the S&P 500 futures rallied late in the Globex session to open the regular trading hours at 3446.75, up 4.0 handles, sold down to 3441.00 and reversed just before 9:00 a.m. CT when the bulls took over and never looked back. The index futures held a strong bid throughout the morning, rallying up to 3469.50 for the morning high just before 11:30. This was a 28.50 handle rally off the morning low, with only a 3.00 handle pullback during that time.
After a 7.00 handle pullback to 3461.50 during the noon hour, the ES traded sideways, coiling back up to break out once again and push to new highs. At 1:00, strong buy programs began to thrust the markets higher, as the ESU20 made its way to up to 3478.00 and then after a sudden reversal down to 3462.25, a 15.75 handle pullback, buyers once again entered the index futures as the S&Ps catapulted higher in the afternoon through the final hour to make a high of day of 3481.00 in the closing minutes before settling the day at 3180.25, up 37.50 handles or +1.09%.
In terms of price action, it was a two-sided day. Most of the morning belonged to the sellers, meanwhile, buyers had a nice, late morning retest of the lows that set up for a strong afternoon rally. Total volume was light with 1.2 million contracts traded.
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Read yesterday’s post. New day, same story. MiM was a samll +500M buy without any breadth, but the market closed into the highs. Very bullish.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Covid-19
We continue to track Covid-19 across all 50 states, DC, and Puerto Rico to gain a better understanding of what is happening. While detected cases continue to expand, we are not seeing the equivalent expansion in hospitalizations and deaths. Our table uses 7-day averages and takes a 5-day linear regression slope in order to detect changes as quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).
All three focus states have a bit of a stall today. Florida is still leading the way for the retreat, Texas is working hard, but California remains stubborn. We are in the big numbers end of the week where big numbers can make big changes.
We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M) looking at daily deaths, but more importantly, changes in the count.
California is still playing catch up with the smaller Texas and Florida. Good progress on the latter two, we expect to see a move down in California the end of this week into next week.
Over / Under
These are the over/under numbers for today. In order to push the 7-day average lower, today’s reported numbers need to be lower than the target number. A new case or death number that is higher will increase the 7-day average.
Yesterday’s over/under numbers and actual are also in the table.
| Yesterday | Yesterday | Today | Today | |
| State | Cases | Deaths | Cases | Deaths |
| Florida | 4,115 / 3,220 | 174 / 155 | 4,555 | 119 |
| Texas | 7,024 / 5,407 | 309 / 178 | 5,303 | 234 |
| California | 6,164 / 6,004 | 181 / 150 | 5,920 | 163 |
| New York | 631 / 566 | 6 / 8 | 601 | 5 |
Use today’s numbers to watch the releases to determine the trend.
To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.
Wear your masks!
Stay Home!
Chart of the Day
Our View:
Powell and New All-Time Stock Market Highs
The short sellers can run but they can’t hide. The PitBull and I both agreed yesterday that we have never seen the likes of the current tech rally. In my humble opinion, the rally in the tech sector is 1,000 X larger than the run up to the 2000 Tech Bubble. We all know how that ended. In all honesty I never in a million years would think the S&P could rally 55% but that’s how this game is played, you have to buy into the uncertainty. Last Friday the ES made a Globex low of 3356 at 7:00 CT, rallied all day and rallied every day this week. In four sessions the ES rose 127.50 handles, 31.875 handles a day. There have been 18 trading sessions in August and only 3 have closed lower. My question is simple; how long can this go on? So many companies in the S&P are being unlisted or facing it. According to Quincy Krosby, chief market strategist at Prudential Financial ‘U.S. equity valuations stand at their highest level since the dot-com boom, the flight to large-cap, tech-related companies reflects caution rather than euphoria’ and Jonathan Golub, chief U.S. equity strategist at Credit Suisse said in a research note that ‘the top five S&P 500 companies today have a greater share of the index’s earnings and trade at a lower multiple than the top five companies in 2000 did’.
I remember very well how the Nasdaq rallied and rallied and rallied going into the 2000 Tech Bubble. The Nasdaq literally rallied every day. But we also knew that the rally was not going to last forever. When the Nasdaq started to reverse it was with death-defying speed.We would put big orders into the Nasdaq futures pit and the order fillers and locals would race the hell out of the orders. It was a very small pit with maybe 25 or 30 locals and order fillers and they made millions scamming the customers. It was sickening and a few even went to jail. That all said, I do not see a crash coming but I also do not think the markets can keep going up without a good pullback.
Our view, the patterns are the patterns, gap up, sell the open, cover and look for the mid-morning low to get long. It works quite well but recently selling the open has not paid off as well as buying the early dip. It threw me off last week and it did yesterday, also. While I was looking to cover the short I neglected the long side. That is why I say sell the early rally and buy the pullbacks or just screw the sell part and buy the dip. Today Fed Chairman Powell speaks and is going to try to convince the public that the central bank can and will deliver in the wake of a pandemic that has arguably eroded trust in U.S. institutions and put a huge chunk of the labor force on the unemployment line and that inflation will be a good thing in the long run. I am not sure how the S&P will receive this but my guess would be with skepticism. Our lean is to tread lightly by selling the early rallies and buying the pullbacks with tight sell stops. My guess is it’s going to be a busy day.
Market Vitals Technical Analysis
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As always, please use protective buy and sell stops when trading futures and options.
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