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S&P 500 futures Recap – Trade Date January 27, 2021

S&P 500 Futures: Biggest Selloff Since September 3rd 

After trading in a 62.00-handle overnight range, the S&P 500 futures opened Wednesday’s cash session at 3806.00, traded a daily high of 3806.75, sold off down to 3759.25 in the opening half hour and then rallied to a midmorning high of 3803.25. Late morning, the ES would trade back down to 3762.75 before pushing to a midday high of 3792.75. The afternoon saw sell momentum re-enter the market as the index futures would fall down to 3706.50, a 100-handle move from the morning high before settling at 3716.00, down 86.50 handles on volume of just under 2.5 million contracts. In terms of price action, it was all about selling the open and then selling rallies throughout the day.   

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

The MIM had a decent sell signal on a 2% down day, that was no surprise. That was paring into the 15:50 reveal but there was still about 1.2B to sell on the 15;50 mark which was taken as bullish and continued an upward trend that had bottomed out at 15:35 which produced a nice 30-point move to the upside on a very volatile day.

Questions?  Please email me: Marlin@mrtopstep.com

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Covid Corner:

The US continues to move in the correct direction as our vaccination program moves along. It might be a good idea at this point to slow air traffic via testing requirements or outright bans to prevent super-spreading covid variants in. The more variants we have, the worse things will get as variants will produce other variants and as they move away from the virus model that the vaccines are based on, the more likely our vaccine program will fail.

Wear your masks!
Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line)
Stay home!
Take your Vitamin D!

Our View

S&P Futures Down 132 Points In 13 1/2 Hours 

I am predicting a big year of rips and dips. I can feel it. Political unrest, the pandemic, a relentless stock market rally and nearly $50 trillion in debt with another $1.9 trillion stimulus package coming down the pipe. Look, I am not an economist but I don’t think you need to be to understand the long term consequences of trillions of debt and no way to pay it back. I know this may sound naive but I don’t fully understand what the Biden administration is doing. Shutting down the Keystone oil pipeline and causing thousands of people to lose their jobs? I get it, Trump did it to Obama when he overturned many of the democrat’s initiatives but the US needs leadership not payback  Allowing transgender men to play women’s sports? Transgenders in the armed forces? Raising taxes? Opening up immigration? If you’re scratching your head, don’t. Remember, I was the one that said Trump would not get re-elected after the first debate. So where is this all going? I don’t know but I think there is reason to be concerned and apparently so does the stock market. 

Our view, I hate to repeat myself but I think 2021 is going to be filled with big drops and pops. It’s also going to be the year the markets teach the Robinhooders a lesion. Our lean, it’s 7:00 am and the NQ is down 90 points, the ES down 2 points and the YMZ is up 42. I am not sure the decline is over but if the ES gaps down on the open my lean would be to buy it. I think there is going to be an early rally, just not sure how far it goes or if it will hold. 

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.}