Market Review
ES – ZONES PRE MARKET UPDATE
Huge volatility with news algos dominating the market is the theme. So what’s the plan? Our view is the best thing to do is try to have your levels marked out where you want to trade in advance, take them and scale-out quickly.
For today we have 4 major zones of high probability for trades:
- Buy 3056, stop 3049, target 3127 – look to scale half after 12 points
- Buy 3031, stop 3027, target 3084 – look to scale half after 12 points
- Buy 3004, stop 2996, target 3085 – look to scale half after 12 points
- Sell 3127, stop 3137, target 3084-3056 – look to scale out after 12 points.
For the intraday levels, you can see the live chart share and join us at Zoom for free today.
ID – 819-562-3358 ( Blue lines buy levels / Red lines suggested stop)
SPX was blocked at 3177 yesterday as was expected and it pulled back. Setting a cash low above 3081.99 should mark the end of this pullback and the resumption of the uptrend towards 3458
Best of luck today.
Gagan Daphu
ES- Zones.
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Slip-slide’n-away. MiM showed sell all through the closing hours and grew close to 1B$ sell around 3:30pm ET. The reveal was supportive at 1.1B sell and the markets obeyed and sold down into the close.
Get the skinny when we get it. Join the MiM.
HFTAlerts
As far as programs, I think this was the busiest day yet. Not sure what that means but we did 431 programs on the day, 219 buys and 212 sells. We will mark this as a significant day and watch closely how it plays out over the next week.
Chart of the Day
Top Stories on MTS Overnight:
- Rebound Attempt Fails, but NASDAQ Manages Small Advance
- BLOCKCHAIN IN BANKING: An inside look at four…
- Trump urges calm even as US reports worrisome new virus case
- Rebound Attempt Fails, but NASDAQ Manages Small Advance
- Thursday: GDP, Unemployment Claims
- Trump Campaign Sues New York Times, Accuses It Of…
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3158.50 | Opening Print: 3142.25 |
| Low: 3091.00 | High 3182.00 |
| Volume: 1.1M | Low: 3107.50 |
| ES Settlement: 3132.50 | |
| Total Volume: 4.3M |
S&P 500 Futures: #Trump#Coronavirus Rally
The ES traded down to 3091.00 on Globex and made a high at 3158.50 with an amazing 1.1 million contracts traded. On yesterday’s 8:30 CT futures open the ES traded 3142.25 and then shot up to 3175.25 and at 9:09 traded back down to 3148. After the pullback, the ES rallied back up to the 3182 area and then dropped back down to the 3162 area. The ES then traded back up to 3177.00.
After a few handle pullback down to 3164.50, the ES traded back up to 3175 (10:41) and then retested the 3154.50 area, bounced a little and then flunked down to 3133.00 and bounced back up to the 3150 area. Just after that several new coronavirus headlines hit the tape and knocked the ES all the way down to 3107.50 around 12:45. The ES then rallied back up to the 3131 level and then pulled back down to the 3114 area.
At 2:00 the ES traded 3114.75 as the early MiM showed $819M to sell. At 2:30 the ES traded 3150 as the MiM showed $906M to sell. On the 2:50 cash imbalance, the ES traded 3121 as the final MiM showed $1.1B to sell. On the 3:00 cash close, the ES traded 3116.25 and settled at 3110.25 on the 3:15 futures close, down 29 handles or -0.92 % on the day.
In terms of the ES’s overall tone, there were two parts to the day, the early short-covering rally and then the coronavirus headlines dump. In terms of the day’s overall trade, total volume was oversized. Total ES volume was 3.8 million with 1.1 million coming from Globex making total day volume 2.7 million contracts traded on the day session.
Our View
Algos Keep Markets in Limbo
Well, I was right about the ‘pop’ but that didn’t last long. The price action in ES is totally controlled by the headlines which in most cases are not bullish. I know there are a lot of folks out there that think the coronavirus is like the flu and I have taken a lot of shit from people saying I am spreading fear. If indeed it is just the flu, why does the virus stay in your body after you feel better? Why are millions upon millions of people being quarantined around the world?
Not sure what’s good about any of this – oil on a 12 month low, yield on the benchmark 10-year note fell to 1.310%, a new all-time low, the VIX at 27.56, gold at $1,650 on its way to $1,700 and a Vanguard investor survey says stocks will return about 5% over the coming year and that the typical investor in the survey is 61 years old and has been a client for 17 years with a median account value is about $221,000 with about 72% in stocks and only 10% move money around. I am just not sure how any of this is good. According to Dow Jones S&P, this is the longest bull market on record, running more than 131 months without a 20% decline from its latest high closing price. Over that period, stocks have returned more than 490%, including dividends. Last year alone, the S&P 500 rose 32%.
Our view, the bulls can run but not hide. Currently, they are holding tough but I think the COVID-19 has shaken their confidence. That said, while I can not rule out a big bounce the headline risk remains front and center. My downside target is the 2900 level. I just hope it doesn’t happen all in one day.
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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