After trading in a 36.50-handle overnight range, the S&P 500 futures opened Friday’s regular trading hours at 3913.25, traded down to 3905.25, rallied to 3923.75 just after 9:00 CT, and would then see lower highs and lows until the daily low of 3904.50 traded at 10:15. From there, buyers would come in pushing the equity indexes higher through the remainder of the morning to 3925.50 just after 11:00. The noon hour saw a pullback to 3915.25 before the rally resumed in a higher chop through the afternoon before accelerating in the final 45 minutes, printing the daily high of 3938.50 before settling the day at 3934.25, up 9.00 handles on total volume of 1.5 million contracts traded. In terms of price action, it was all about buying the midmorning low and holding to cover just before settlement.
In the Tradechat Room
MiM & SpyGate
The 15:50 MOC was a decent 1.2B to buy which sold off the 15:50 MOC, viewed as not enough to get the momentum going. Whoever is firing off that program at 15:49:59 has made the right call every day for the past week:
I would like their data. On Spygate as a whole we sniffed out 61 buys and 69 sells during the day.
That was an average day with just over 100 programs.
Spygate is now part of the MIM trading groups data.
Daily new cases and deaths continue to fall across the US. Europe is starting to see another wave taking off and the US is usually not far behind. Will the vaccinations be enough to keep it at bay?
The achieved goal of 100M jabs in 100 days was already in the bag in January, assuming there was no slip-up. The infrastructure was in place, the goal is way too small. 100M singly vaccinated people in April will not be enough to keep the virus at bay, we would need twice that. Maine is hitting that 1% number and some other states are there, too. California is below the already too low national number of around 0.5%.
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
Dow and S&P On Track To Make New Highs This Week
While the three-week sell-off pushed the Nasdaq into corrective territory the Russell and Dow never went down hard and have now traded up to new contract highs. While the S&P futures failed to make a new contract high last week, I feel confident it will this week. I think the Dow and S&P should start to go a lot higher and according to the Stock Trader’s Almanac, March’s option expiration week performance is second only to December’s and has a bullish bias. DJIA and S&P 500 have recorded weekly gains in about twice the number of weeks as declines. NASDAQ’s track record since 1983 is slightly softer with 23 advances and 15 declines, but all three indices have logged gains in options expiration week in ten of the last thirteen years. However, the week after is bearish for DJIA, S&P 500 and NASDAQ. S&P 500 is weakest, down eight of the last nine. Last year, as Covid-19 began spreading globally and economies began to shut down, DJIA and S&P 500 suffered their worst weekly declines during March’s quarterly options expiration.
Our view, I think we are in for a big up week. From my count, the Nasdaq will be the weak link for the next 2 weeks. People will continue to sell tech and buy the Dow and S&P. I think the Dax is going to 16,300 over the next 12 weeks and gold and silver will bounce. The $1.9 trillion Covid-19 stimulus program is going to provide a record level of liquidity. Our lean is to buy any 15- to 20- handle pullback in the ES but I cannot rule out selling the ES up 25 points on the open or selling the NQ at 13,100 or up 165 points. You can take it from there.
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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