S&P 500 Futures Recap – Trade Date February 19, 2021
S&P 500 Futures: Down Nearly 1% On The Week
After trading in a 40.75-handle overnight range, the S&P 500 futures opened Friday’s cash session at 3923.75, and traded to the morning low of 3913.75 during the opening minutes before rallying to the daily high of 3928.25 just after 10:30 CT. From there, a wave of selling would enter the equity futures pushing the ES down through the rest of the morning and trading a noon low of 3901.75. After a bounce to the afternoon high of 3913.75, the markets would continue to see lower highs and lower lows for the duration of the afternoon as the index eventually found a daily low of 3896.75 just before settlement. At the end of the day, the ESH21 closed at 3898.50, down 11.00 handles or -0.29% on a modest volume of 1.3 million contracts traded. In terms of price action, it was all about selling the mid to late-morning high and holding to cover near the close.
In the Tradechat Room
MiM & SpyGate
OPEX MiMs to me are untradeable, at least for now until we get some more insight to how the algos are trading with our SpyGate product. The 15:50 MOC was 1.5B to buy, but just a small symbol lean to the buy-side. That MOC rally started at 14:30 and ran just short of the reveal for about 12 points and then did a sell into the close for the Friday. The Early MIM was right on the money showing barely a blip on the reveal but there was no profit there. OPEX is so widely hedged and played in so many directions that it makes what a sailor would call “confused seas”, waves in every direction.
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.
The USA suffered a set back which was blamed on weather as we slipped below 1.5M does per day when we need to be getting to 2M doses a day. We should see some decent numbers this week as we fill in the backlog.
Israel has now vaccinated half the country (not sure if that is half of qualifed ie: 16+ or total population). The UK is now at 25% with the USA having about half of at 13%. Studies from Israel are suggesting that single doses of the dual-dose vaccines are proving 85% effective six weeks out, so that is good news for the UK strategy of prioritizing first doeses for more over 2nd doses.
In the fully-vaccinated category, Israel has over 1/3 its population fully dosed now with the US at 5.6%. The UK using their strategy has less than 1% of its population fully dosed.
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
Troubled Waters Ahead
On Wednesday of last week, someone in the forum asked about how the ‘stats’ looked and I explained they were weak and that the February expiration was down. Did I follow that information? No, I didn’t and I gave back most of the profits I made earlier in the week. The liquidation in the Nasdaq / tech weighed on the stock market all last week and right into Friday’s close and I suspect that weakness will carry through right into the new week. The overall price action of the markets has ‘flipped’ from pulling back and making new highs to short-covering rallies that fail. How long will this decline last? I’m not sure but what I am sure about is there are a lot of downside sell stops building up under 3885.
On Tuesday, Federal Reserve chairman Jerome Powell will testify before the Senate Banking Committee on the semiannual monetary policy and on Wednesday he will be before the House Financial Services Committee. The Biden administration begins the final push on the $1.9 trillion stimulus bill this week, dropping any pretense of bipartisanship to quickly pass the package before an earlier round of benefits runs out.
Our view, this is going to be a big week for the stock market. Our lean is to buy the early weakness and sell the rallies. Historically, the market tends to be weak during the Feds testimony.
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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