Market Review
Wow, just wow… On Friday, the DOW made the largest point gain ever fueled by President Trump’s Friday afternoon Rose Garden coronavirus news briefing. Trump tweeted Saturday, “BIGGEST STOCK MARKET RISE in HISTORY YESTERDAY!”. The move followed Thursday, Monday, and Wednesday, the first, second, and third-largest point declines and failed to recover Thursday’s losses. On Monday, the ESM20 erased Friday’s entire mega-bounce and more. It came up just short of testing the Dec 26, 2018 hard swing low.
Volatility has gone crazy. The ESM20 5-day ATR is 268 points, meaning on average over the last 5 trading days, the ESM20’s daily range was 268 points (or $13,400 per contract). Feels like we’re back in 2008/09. Panic and fear, much stronger human emotions than greed, are consuming the markets.
The day-trading possibilities in the current volatility environment are incredible. There are swings of greater than 40 ESM20 points all day long. The chart below shows the swing sizes for the last 2 hours of cash session; big swings = big opportunities. Despite the extreme volatility, price still trades well between DTG’s support and resistance zones as can also be seen on the chart.
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Economic Calendar
Closing Prices
Closing prices for Monday, March 16
In the Tradechat Room
MiM
That MOC number out of the chute had us drop into the close with a final reveal of 4.6B to sell. While a 100-point fall on any other day would make us blink, our divide by 10 rule during this time of volatility has us thinking in normal ranges.
Get the skinny when we get it. Join the MiM.
HFTAlert
For the first time, our HFT programs all fit on a single page. Just 22 programs, 11 Buys and 11 sells. While the halt in the AM was disruptive, the day felt a bit more solid than the previous trading week’s.
Chart of the Day
Traffic in Beijing returning to normal:
Traffic in NYC Starting to trail off:
Traffic in London: Keep calm and carry on:
Top Stories on MTS Overnight:
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- Uncertainty surrounds Democratic primary as Ohio scraps vote
- NCBA addressing market concerns amid coronavirus outbreak
- Market Swings Back Down
- Federal Reserve Board approves actions by the Boards…
- Tuesday: Retail Sales, Industrial Production,…
- DocSynk Announces Key Milestones In Its Path to Series A
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 2678.75 | Opening Print: 2501.50 down 7% LIMIT |
| Low: 2555.50 down 5% Down LIMIT | High 2548.50 |
| Volume: 138,000 | Low: 2350.00 |
| ES Settlement: 2350.00 | |
| Total Volume: 3.47 M |
S&P 500 Futures: TRUMP SAYS WORST OF VIRUS OUTBREAK COULD BE OVER BY JULY OR AUGUST OR LATER
There have been more limit up and down moves than I have ever seen and you know what? There are many more to come.
After the fed announced QE5 on Sunday, the futures that sold off from Friday’s close rallied and then fell sharply. The high on Globex was 2678.75 and the low was LIMIT DOWN at 2525.50. After trading to the down 7% ES LIMIT DOWN at 2501.00 the ES reopened and traded all the way down to 2350.00, rallied all the way up to 2548.50 and then sold off down to the 2419.00
At 2:00 the ES traded 2574.00 as the early MiM showed $2.2 billion for sale, traded 2424.00 at 2:30 as the MiM dropped down to $3.1 billion for sale and then sold off down to 2402 after Trump said ‘WORST OF VIRUS OUTBREAK COULD BE OVER BY JULY OR AUGUST OR LATER’. The ES traded 2410 on at 2:50 as the final cash imbalance showed $3.8 billion to sell. On the 3:00 cash close the ES traded at 2377.25 and settled at 2404.75 on the 3:15 futures close, down 248 handles or -9.35% on the day.
In terms of overall tone, it was both deplorable and scary. In terms of the day’s overall trade, total volume was 2.2 million with 138,000 coming from Globex making total day volume just over 2 million contracts traded on the day session
Our View
Dows Largest Point Loss Since 1987
First I want to say that ‘in general’ I write the Opening Print the night before so if you were wondering why it didn’t include the feds new QE program and price action that’s the reason why.
To combat the potential economic fallout, central banks and governments have put in place various stimulus measures. So far those efforts have failed to stem the stock market sell-off. Yesterday the Dow had its biggest point loss since 1987. The S&P is now off 30% since it peaked less than a month ago. Apple Inc and Microsoft both lost over 12% yesterday. Nasdaq Com fell 970.28 points, or 12%, the index’s steepest ever one-day fall. As I am writing this a headline came out saying: Entire SF Bay Area on lockdown for 3 weeks, 8 to 9 million people. The #ES quickly sold off down to 2384.50 and rallied up to 2542.50, I am not sure I understand that but the only thing I can say is the ES is extremely oversold.
Our view, it could get to a point that the overwhelmingly bad news turns into a buy. I do not think we are there yet and still expect to see the ES trade down to 2000.00. Today could see a decent bounce but my guess is it doesn’t last. If any major cities like NY, Chicago or LA get locked down the ES will be back to limit down. My guess is we see the S&P down 40% or more. Just not sure that’s today.
Market Vitals Technical Analysis
Did you know that your premium membership gives you access to our Market Vitals? Click on the image below and get today’s key levels.
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.
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