After trading in a 51.00 handle overnight range leaning higher, the S&P 500 futures opened Friday’s regular session at 3553.50, up 16.75 handles and went on to trade an early high of 3563.25 in the first half-hour before selling down to the daily low of 3547.50 just before 10:00 CT. From there, the ES mounted a rally that would extend to the morning high of 3568.25.
The afternoon would continue to see the surge of buying as the S&Ps were firm into the final hour, then saw a buying surge late in the day printing a daily high of 3590.00, a 42.50 handle bounce from the morning low. However, profit-taking into the close pushed the ESZ to settle at 3581.25, up 48.75 handles or +1.38 % on modest total volume of 1.2 million.
In terms of price action, it was all about buying the low just ahead of 10:00 and riding the buy pressure into the final hour.
In the Tradechat Room
A nice MOC buy imbalance at 15:50 producing a 74% symbol lean to the buy-side (83%$) sent the market higher into the close with a nice 20 point gain.
Maine has been on the bad-boy list for a week as the “spared” states of New England are finally participating in the latest release. Expect the news to be grim as hospitalizations and death start to reflect the rate of increase in the current outbreak. By November 20, the USA could produce a 200K case day which will be headline news. More states will announce mitigation from lockdowns to restrictions. The state charts all look pretty bleak. Hawaii is the only one I could find that has it balanced right now.
Wear your masks! Stay home! Take your Vitamin D!
Chart of the Day
GMTT – chart of the day – Nat Gas – Nov 16, 2020
Nat Gas (DEC)
Last week GMTT was looking to go short Nat Gas below 2.92.
This morning Nat Gas elected our trade, and we are short Nat Gas with a tight buy stop at 2.97.
First downside target 2.81, then followed by 2.63.
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COVID-19; 54.2 Million Cases Worldwide. 11.2 Million Cases In the U.S; 184,000 New Cases On Saturday
COVID-19 took a back seat to the election for several weeks but that show is over. Last Saturday the U.S. reported 184,000 new cases in one day. I know there are a lot of folks that think the stock market is going to rally now that Joe Biden has won the election but I have two questions/ What happened to the stimulus and how far can stocks go before they start weighing the risk of lockdowns? Let’s face it, there is a new sheriff in town and based on the said agenda one would expect some rapid changes. I for one do not like the idea but if that’s what we have to do to slow this virus down while we wait for a vaccine I’m all for it. What I am not all for is people losing jobs and more companies going out of business. We live in the most divided America in its history. I doubt this will happen but it would be a good idea for our politicians to work together for the welfare of its citizens. Make sure the elderly and sick and not forgotten. Work to heal the social and ethnic divide on a level of understanding, not by threats. I am 62 years old and I have travelled the world, I have met princesses and kings, I did business for some of the largest banks, hedge funds and some of the top traders in the world. As I have said; I have been to the top of the mountain and the bottom of the mountain and now I am somewhere in between and I am OK with that but I am not worried about me. I worry about my wife and my 26-year-old daughter. Yesterday fifteen countries backed by China signed a major trade deal after posing an early challenge to President-elect Joe Biden as he formulates his administration’s trade policies. The longer the pandemic goes on the longer it will take for the U.S to kick in manufacturing. Even then I don’t think everyone that voted is going to like how the ‘new world’ operates. A friend told me that his buddy’s dad is high up in the Chicago Police and he asked him if there was an emergency / 911 call would anyone respond and he said ‘it’s unlikely’. Macy’s was looted a few days ago and absolutely nothing was reported. Looters also hit Old Navy on State St. last night, absolutely not reported again. This has been going on throughout the country. Is this what people voted for? So to get back to the 54 million worldwide COVID cases and the 11 million cases in the U.S., all you have to do is the ‘math’ at 175,000 cases a day x 20 days is 3.5 million, 30 days is an astonishing 5,250,000, you don’t want to know what the numbers look like in 50 days. That all said, I agree the markets want to go up but as the COVID case load increases the first round of COVID-19 will look like playtime in comparison to the second wave. People are already hoarding, it’s gotten real busy at COSTCO and Sam’s Warehouse.
Our view, here’s the deal. The ES and NQ want to go higher but you have to keep an eye on the ‘rotations’. If the ES is firm and the NQ is lagging you want to go with the ES. If the next day it’s buying the NQ then jump on that boat. I think the ES has a short at 3630, I put that out in the MTS forum on Wednesday and Trader Dave agreed. That all said, don’t take your eye off the ball, the trend is your friend and it’s up right now but ‘beware the headlines’, COVID19 will matter. Our lean, you can sell the early rallies, cover and look for a mid-morning low to pay a long off of or just be a patient trader and buy the pull backs.
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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