Premium OP: The Ever Elusive 3300

by Danny Riley
on August 3, 2020

Market Review

S&P 500 RECAP – Trade Date 7/31/ 2020

#ES Morning Selling Leads To Afternoon Highs 

After trading in a 38.50 handle range during the overnight session the S&P 500 futures opened Friday’s regular session at 3258.00 and then immediately printed a morning high of 3260.50 before selling off down to an early morning low of 3223.25 and then rallied 20 handles to a late morning high of 3243.25 before pushing down to the low of the day at 3212.50 just before noon.

The afternoon saw that midday low hold, as buyers came in pushing the equity index futures higher to an early afternoon high of 3229.50. After an 11 handle drop, to make a higher low, the S&P stayed on the bid the rest of the day, printing a late day high of 3267.00 just after the cash close before settling the day at 3263.75 up 15.00 handles on the day or .49%.

In terms of the ES’s overall tone, the sell-off was totally overrun by the end of the month rebalance. In terms of the overall trade, volume was high at 1.95 million contracts traded. 

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

The EOM (end of month) MiM did not disappoint with a 4.3B reveal at the 15:50 ET bar. We were showing a strong buy lean all afternoon and the markets rose steadily into the close rendering the reveal as a non-event after a 30-point rise.

Questions?  Please email me: Marlin@mrtopstep.com

Get the skinny when we get it:  Join the MiM. 

Covid-19

Top 10 Worst
Top Ten Best

We continue to track Covid-19 across all 50 states, DC, and Puerto Rico to gain a better understanding of what is happening. While detected cases continue to expand, we are not seeing the equivalent expansion in hospitalizations and deaths. Our table uses 7-day averages and takes a 5-day linear regression slope in order to detect changes as quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).

Florida showing an improving drop of new cases through the weekend.
Texas also treding in a good direct.
The tick up in new cases over the weekend is concerning, we need to see a consistent under number coming out of the golden state

We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M), looking at daily deaths, but more importantly, changes in the count.

We are still holding to our expectations of seeing a consistent downtrend in new deaths this week. It looks like Florida might be reversing, Texas is struggling to reverse. CA continues to break out and should be the last of the big three to start seeing a downtrend.

Over / Under

These are the over/under numbers for 8/3/2020. In order to push the 7-day average lower, today’s reported numbers need to be lower than the target number. A new case or death number that is higher will increase the 7-day average.

Friday’s over/under numbers and actual are also in the table.

FridayFridayTodayToday
StateCasesDeathsCasesDeaths
Florida12,444 / 9,007136 / 2579,34478
Texas8,701 / 8,839196 / 2655,810153
California9,718 / 8,086159 / 968,25979
New York753 / 6449 / 95363
Friday’s numbers are the over-under number / actual. An actual that is greater than the over-under number will send the 7-0day average higher (not good) a lower number will send the 7-day average lower (good).
Use today’s numbers to watch the releases to determine the trend.

To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.

Wear your masks!
Stay Home!

Chart of the Day

Top Stories on MTS Overnight:

Our View

The Ever Elusive #ES 3300

I can’t count how many times I have said ES 3300 on TAP. It’s fooled me several times but you know what ? I still think the ES is going up through the ‘big figure’ and beyond. Every time it fails at the upper end of the range it only adds more buy stops. While the stats are negative on the first trading day of August the VIX is telling a different story. 

Our view, I don’t think the rally is sustainable but I do not see a top right now. The dollar has rallied and gold feels toppy. If the ES gaps high I ordinarily would look to sell the open but with so many buy stops above I’m hesitant. The other part is while the democrats and republicans have yet to reach a deal on the new stimulus program my guess is they come to terms and that will send the ES even higher. Our lean, I can’t rule out selling a gap up and buying the pullback. Ideally, I’m still a buyer of weakness. 3330 is where I think the ES is headed 

Danny Riley is a 39-year veteran of the CME  trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.

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.

Click to access today’s values

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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