***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 3 (CD3): Positive 3 Day Cycle Statistic was fulfilled as price held bid, but no further advancement following Cycle Day 2 sharp decline and recovery rally. Range was 31.25 handles on 1.092M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Core cycle objectives have been fulfilled. Normal for CD1 is decline with an average measuring 3648 handle. IF price can clear 3695 – 3700 zone, THEN bulls have the opportunity to push for higher prices heading into the Christmas Holiday. As Danny Riley (Dboy) says: “Thin To Win”. There are two estimated scenarios to consider for today’s trading.
Three states/territories joined the rising group, the Marshal Islands, Puerto Rico, and Alabama. Tennessee moved from rising to stable. We had a net loss of four falling states; New Jersey, Nebraska, Arizona, Vermont and Oregon all moved to stable from falling and DC was added to the falling list.
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
Germany restaurant shutdowns.
(ESH20:CME) GLOBEX Session
(ESH20:CME) Day Session
Opening Print: 3687.75
Total Volume 1.1 M
S&P 500 Futures Recap – Trade Date December 22, 2020
S&P 500 Futures: ES/NQ Stay Red While YM/RTY Close Green AGAIN
After trading in a 31.25 handle overnight range, the S&P 500 futures opened Tuesday’s cash session at 3687.75, up 2.00 handles, traded a morning high a tick above the open and then went sideways before selling down to a daily low of 3665.75 at 10:45 CT. From there, the futures would grind slowly higher to the daily high of 3688.25 at 12:45.
The rest of the afternoon would see a slower downward move to 3671.50 before settling the day at 3676.25, down 9.50 handles or 0.26%. In terms of price action, it was all about selling the open and then buying the midmorning low. In terms of volume, a modest 1.09 million contracts traded.
Trump’s Farewell; Subs In The Gulf, Stimulus Veto Threat and Pardons
Headlines are a daily occurrence. Sometimes they are good headlines and sometimes they are bad but mostly they are a temporary disturbance. Last night’s drop of 33 handles was preceded by a 40 handle rally. The bottom line is if you’re patient, these headlines generally make for great buy ops. In addition to Trump’s stimulus veto threat, he also sent some of the most powerful military tools in the US arsenal, attack subs, to the Persian Gulf to send a message to Iran and overnight he issued a raft of pre-Christmas pardons and commutations Tuesday, favoring the well-connected and those with A-list advocates while overlooking more than 14,000 people who have applied for clemency. There are only 27 days until Trump leaves the office as President and I’m sure he will continue his antics right up until January 20th.
Our view, sell the open or the first rally above and look for an early pullback to cover and go long. Push back from the screens and come back for the MIM trade. Tomorrow starts the Santa Claus rally that lasts until the second trading day of January. You could tell fewer people were trading yesterday and that trend should continue right into the beginning of the new year. As I said earlier this week; trade less if you are trading and pick your spots better. No reason to ruin the holiday with a bunch of bad trades.
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.