S&P 500 Futures Recap – Trade Date January 8, 2021
First Week is a Winner
After trading in a 31.25 handle overnight range, the S&P 500 futures opened Friday’s cash session at 3765.75 and traded the daily low of 3663.75 in the initial minutes before heavy buy programs came in pushing the index futures higher throughout the early morning, up to 3803.25 just after 10:00. From there, the futures would trade sideways for the rest of the morning, through the noon hour and early afternoon. The index printed the daily high of 3804.00 just before settling at 3797.25, up 81.50 handles or +2.18% on volume of 1.2 million. In terms of price action, it was all about buying the open and holding into the late-day high.
In the Tradechat Room
Up, up, and away in the beautiful bull-market. MiM was all bullish into the close with a 15:50 MOC of 3.7M but the trade was from 2 pm into the close as it made an almost 40-point rush to close the week.
Our US map of case trends is starting to settle down. It won’t be until next week that we have decent data to extract trend from. Regardless of the new cases trend we are hopfully at a peak, if not we are in big trouble as deaths continue to rise post new cases.
The rush to vaccinate is on and Israel is far away in the lead. Over the weekend they announced a secure pipeline to the Pfizer vaccine in turn for long term data sharing turning the country into a giant stage X trial. Almost everyone over 60 that wants a vaccine has been inoculated and this week the over-50 crowd are on deck. The organization, healthcare system, small population, and universal digital health records make Israel a unique candidate for becoming the first country to be fully vaccinated. That goal is expected to be reached by the end of March.
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
GMTT – chart of the day – Crude oil – Jan 11, 2021
Crude (FEB) Energy could be the trade for January as Crude and XLE are both breaking out! Crude is on a buy signal and gives a next upside target of 53.60. XLE gives a next upside target of 43.65. Suggested sell stop are for Crude 50.25 and for XLE 41.15.
Nat Gas (FEB) We are still holding Nat Gas long from 2.36 and keep the sell stop at 2.46. Next upside target 2.82.
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The Trump Impeachment
The news about impeaching President Trump is a market disruptor but that’s not the only news out this week with only 9 days until Joe Biden’s inauguration. Wednesday is the release of the December consumer prices, Thursday we get a look at China exports and US jobless claims and on Friday we get a look at retail sales which fell in October and November but the December number will show more insight into the severity of the broader economic slowdown at the end of the year and U.S. industrial production is expected to increase in December. It’s going to be a busy week of headline news.
Our view, the impeachments news dragged the ES down on the open and I expected it to be weak throughout the night. With the markets up so much and on new highs I suspect we see lower prices but many times when the ES is down Sunday night it rallies early Monday. Our lean, if the ES is at or near its lows on the open, buy the early weakness using tight stops. If that doesn’t work then I’m going to kick back and get a look at the price action. We all know the ES is at an extreme so it’s not impossible we see another flush/downside stop run.
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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