Market Review
NJ – The Discovery Trading Group
The bulls like no data Mondays. After last week’s coronavirus fueled selloff and Monday’s 10-point gap down open, the ESH20 made a solid bullish and unidirectional 35-point move to settle at 3352.25, just under its 3357.75 all-time high. During Globex, the all-time high was probed and we now have a new high which may be probed again before the US session opens at 9:30 am ET.
Today’s ESH20 Day Frame is 3317/20 to 3394/97. The Day Frame defines the expected US session playground for today’s ESH20 price movement.
The ESH20 is working a short-term, 70-point wide uptrend channel with plenty of room to move to the upside or the downside. The market should find trendline resistance in the 3389/92s area and trendline support in the 3320/23s area.
Volatility ticked up slightly yesterday but expect upside volatility to contract if the ESH20 continues to move higher. Institutional size bias was strongly bullish yesterday and remains bullish overnight, however, GLOBEX volume continues to fall as the ESH20 moves higher.
As always, thanks for reading and all the best with your trading.
Economic Calendar
Closing Prices
In the Tradechat Rooms
The MiM
Another buying MiM stealthily hid until 3:50 pm. The market had a very nice 16 handle gain over the closing hours though.
HFT Alert
Almost no program activity today. The overall market volume was quite light. Gravity is still up for this market when there is light trade.
Chart of the Day
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3334.50 | Opening Print: 3316.25 |
| Low: 3303.50 | High 3348.00 |
| Volume: 420,000 | Low: 3316.25 |
| ES Settlement: 3353.00 | |
| Total Volume: 1M |
S&P 500 Futures: Coronavirus Spreads, ES Dips Then Rips
The news that there were over 40,000 reported cases of the coronavirus in China, the death total is nearing 1,000 people, it has now spread to 17 countries and there are two cruise ships quarantined with 190 cases ‘spooked’ the S&P futures down to 3303.50 on Globex Sunday night. After the low, the ES rallied all the way to 3334.50 and opened Monday’s regular session at 3316.25 and at 9:40 CT had traded all the way up to 3341.50 and then sold off down to the 3333.00 area. After some ‘back and fill’ in the 3334.00 to 3336.00 range, traded back to 3338 and then pulled back down to 3334.50 and back up to 3343.00 at 2:00 CT as the early MiM showed $193 million to sell and promptly traded up to another new daily high at 3346.50.
At 2:30 the ES traded 3346.00 as the MiM showed $154 million to sell, traded 3345.00 on the 2:50 cash imbalance as the final cash imbalance flipped to $512 million to buy and traded up to 3349.50 at 2:58. On the 3:00 cash close the ES traded 3351.00 (3351.75 high) and then traded 3353.00 on the 3:15 futures close, up 30 handles or +0.90% on the day.
In terms of the ES’s overall tone, most of the selling was done overnight and once that was used up it became a big buy fest. In terms of the day’s trade, a total of 1.32 million futures traded with 420,000 coming from Globex meaning the total for the day session was only 900,000.
Our view:
I know the coronavirus is a giant concern. The spread of the virus is increasing and it’s literally showing up all over the world. Yesterday there was a news story that 9 family members in Hong Kong have tested positive for the virus. Many people continue to say that more people die from the flu and that’s probably true but this isn’t the flu.
Today Fed Chair Jerome Powell will deliver his semi-annual testimony before Congress which will include his views on the U.S. economy and the economic cost of the coronavirus along with half a dozen Fed officials who are due to make public comments. Additionally, Germany and the U.K. will be reporting growth numbers and several central banks including Sweden, New Zealand, and Mexico are among those due to set rates.
We still think higher prices are in store. Like I always say, you can sell the early rallies and buy the pullbacks or just keep it in mind that the trend is your friend and buy the pullbacks. 3375,3380, 3406 are ON TAP!!!
PitBull:
CLH OSC -13/-26 TURNS UP ON A CLOSE ABOVE 5017 ESH OSC 24/5 TURNS UP ON A CLOSE ABOVE 338565 VIX OSC -13/-26 TURNS DOWN ON A CLOSE BELOW 1405
Market Vitals Technical Analysis
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As always, please use protective buy and sell stops when trading futures and options.
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