***Written 8pm Tuesday evening for Wednesday’s trading
Tuesday’s Session wasCycle Day 3 (CD3): Price consolidated throughout the session but with buyers still aggressively responding on the dips. Value continues to shift higher with new all-time highs this week. Range was 18.25 handles on 861k contracts exchanged with a marked decrease in both metrics.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us intoCycle Day 1 (CD1): Normal for CD1 is for some magnitude decline, with the average measuring 3885. Having closed near the high of the day, momentum may push price higher before the decline starts. As such, there are two estimated scenarios to consider for today’s trading.
Eastern Africa, Vietnam, and Thailand areas are the current hotspots in the world. Cuba is also seeing rising cases. Most of the world is experiencing a Covid cooling off period.
Regional cotribution to daily cases.
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
Focusing on the fastest-rising U.S. stocks makes sense with larger and smaller companies by market value, according to Ari Wald, Oppenheimer & Co.’s chief technical analyst. Wald recommended buying exchange-traded funds linked to the MSCI USA Momentum and Dorsey Wright SmallCap Technical Leaders indexes in a report Saturday. Both indicators rose to records Monday relative to market indexes: the S&P 500 and the Russell 2000, respectively. Wald’s picks were the iShares MSCI USA Momentum Factor and Invesco DWA SmallCap Momentum ETFs.
(ESH20:CME) GLOBEX Session
(ESH20:CME) Day Session
Opening Print: 3896.00
Total Volume 930,000
S&P 500 Futures Recap – Trade Date February 9, 2021
S&P 500 Futures: Slowest Day of the Year
After trading in a 14.25-handle overnight range, the S&P 500 futures opened Tuesday’s cash session at 3897.75, traded the 3895.00 daily low on the open, and then chopped higher through the morning printing 3911.50 just before noon. The afternoon looked much like the morning with a series of higher lows as the ES would go on to the daily high of 3912.25 just before 2:00 CT. The index went on to settle at 3909.50, up two ticks on low volume of 862,000 contracts. In terms of price action, it was all about buying the early low, and adding on the pullbacks while cashing in on the midafternoon high.
#Stocks: Path Of Least Resistance, Still Higher
Yesterday, stocks made record highs but only Nasdaq closed on a record while the Dow and S&P settled just below. Clearly, the path of least resistance remains higher but most of yesterday’s trade in the S&P was a low volume grind. At 2:30 ET total volume was under 560,000 contracts. As I mentioned in yesterday’s Opening Print, the higher the S&P goes, the lower the volume gets which I believe will continue.
Our view, the ES traded up to 3924.00 on Globex meeting my 3920.00 objective. A new poll out this morning shows 64% of investors believe the stock market is rigged. For years we have spoken about the guys with the better seats, some thought that was a joke but they don’t anymore. Our lean is to sell the higher open or the early rallies and buy the pullbacks. I think the pattern of the ES having pullbacks and then making new highs will continue.
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.