The hangover from President Trumps wiretap accusations helped push the S&P futures (ESH17:CME) below Sunday nights globex low to 2367.00. Before the futures made their mid morning low I put this out:
09:17:33 TRADINGDATA2: (driley) Maybe I am wrong and I can’t rule out another drop or retest of the lows but I do not get the feeling the ES is going to reverse hard.
10:57:44 TRADINGDATA2: (driley) I think we are at or near the early low
11:00:50 TRADINGDATA2: (driley) 2.5k buys off the 2367.50s (the total ended up 4 buys and 4.5k ES bought)
11:06:01 TRADINGDATA2: (driley) I bought the dip off the low – several decent sized buys showing up.
The first part of the day, win lose or draw, is what I am good at; picking out large clusters of volume after a low is made. After I put those messages out the ESH17 rallied up to 2370.50, and then fell back just as Europe was closing. So the futures went 2.5 handles my way and just traded back down to my price. As I write this I do not know what the outcome of the trade will be, but if the S&P firms and the guys with the better seats show up, I stand a good chance at making a winning trade. The other part that is working in my favor is that TopNotch Trading’s technical sheet had a level at 2367.00. I am betting that the S&P shakes off the Trump accusations.
I just got off the phone with the PitBull and he asked me what I thought. I told him that the ESH17 would ‘level off’ and not go up or down much over the next few days. I know the ECBs Mario Draghi speaks this week, and Friday is the jobs report, but I just do not get the feeling a big, or a little, shake out is coming.
After the early 2367.00 bottom, the (ESH17:CME) completed the MrTopStep 10 handle rule (see MrTopStepTrading Rules) on the upside, trading all the way up to 2376.75, just one tick shy of an exact 10 handle move. Yes, I made a winning trade, but I sold 2373.00s and only profited from half the move. From there, the futures traded sideways into the final hour, as the MiM starting showing over $500 million to buy. With the MiM building to just under a billion to buy, the S&P’s shot up to a new high at 2378.25, before selling off back down to 2373.50. The futures settled the session at 2375.50, down 5.25 handles on the day. In the end I picked the low, made 5.25 handles on the trade, and left another 5 to 7 handles on the table.
While You Were Sleeping
Overnight, global equity markets were mixed as Asia was mostly higher followed by a very choppy Europe session. The S&P 500 futures have traded in a quiet 5 handle range during the globex session, with the low printing at 2370.50 on the open, and the high at 2375.50 trading late in the Asian session. The time is now 5:45 am cst and the last print is 2371.75, down 3.25 handles, on volume of 81k.
In Asia, 7 out of 11 markets closed higher (Shanghai +0.26%), and in Europe 6 out of 11 markets are trading lower this morning (DAX +0.04%). Today’s economic calendar includes International Trade, Gallup US ECI, Redbook, a 4-Week Bill Auction, a 3-Yr Note Auction, and Consumer Credit.
Our View
The big questions of the week are will any of the up coming events make any difference in the overall price action of the S&P? Will Mario Draghi change the course of the ES? I do not think so! Will the China data change things? It could temporarily, but not over the long haul. Will Friday’s jobs report change the direction of the fed’s upcoming rate hike? I doubt that, but that doesn’t mean all the negative stats just before and after the March Quad Witch won’t.
My gut feeling is that there could be some bumps in the road, but if there is going to be any ‘real weakness’ it will come near the end of the month / end of the quarter. Our view; Turn Around Tuesday has been up 6 out of the last 10 Tuesdays, or up 5 of the last 8, or up 4 of the last 6. You can sell the early to midday rallies and buy weakness, or just wait for the ES to pull back and buy into it.
PITBULL: clj osc -13/0 turns up on a close above 5210, esh osc 11/26 turns up on a close above 229463, vix osc -7/2 turns up on a close above 1218.
Market Vitals for Tuesday 03-07-2017
[gview file=”https://mrtopstep.com/wp-content/uploads/2017/03/Market-Vitals-17.03.07.pdf”]
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 7 out of 11 markets closed higher: Shanghai Comp +0.26%, Hang Seng +0.36%, Nikkei -0.18%
- In Europe 6 out of 11 markets are trading lower: CAC -0.32% DAX +0.04%, FTSE +0.02% at 6:00am ET
- Fair Value: S&P -0.71, NASDAQ +0.54, Dow -8.04
- Total Volume: 1.37m ESH and 3.7k SPH traded
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