Market Review
Scenario number 1 from last week is playing out: “If the 2975 resistance can be cleared, the 3090s significant resistance should be reached.” The 2975 resistance area was broken on Tuesday, retested as support, and cleared on Wednesday. Now the ESM20 is poised under the significant resistance area which technically runs from 3071 to 3096, a resistance area created in early March before the ESM20 took the COVID-19 tumble through its 50-day moving average. Above the resistance area is a low-volume area cave which if reached, the ESM20 could spend a few weeks paving between the 3070s and 3170s.
For this week, the scenarios are as follows:
1. The ESM20 will test the 3071 to 3096 resistance area but it may prove difficult to move through without some fundamental (i.e. news events) reasons to do so.
2. If the 3090s can be cleared, the ESM20 should work the 3070s to 3170 low-volume area for the next week or two.
3. If the 3090s resistance holds, the 2960s is now support and should hold for the next retest sans a news driven event.
4. If the 2960s are cleared, the 2900 area should be revisited.
In a sign that some normalcy is returning to the ESM20, volatility continues to decline. Volatility remains elevated and we expect it to continue to decline if the bulls can push the ESM20 higher.
Below is a snap of the ESM20 daily chart with the above support and resistance numbers marked for reference. Thanks again for reading. For more information on how DTG can help your trading, visit us at DiscoveryTradingGroup.com
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
A small MIM into a falling close on a fighting market. There was not size on either side of the imbalance yesterday and it was reflected in a directionless trade. The range was about 7 points so a nimble scalper could have made the trade but a more direction minded fellow would have not had much to do.
The MiM will warm back up after the opening week here.
Reminder: June is Russell 2000 reconstitution month. Here is the schedule for that:
- Friday, May 8 – “rank day” – Russell US Index membership eligibility for 2020 reconstitution determined from constituent market capitalization at market close.
- Friday, May 22 – “query period” begins – preliminary shares & free-float information for Russell 3000 Index constituents are published daily & queries welcomes (query period runs through June 12)
- June 5 – preliminary US index add & delete lists posted to the FTSE Russell website after 6 PM US eastern time.
- June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
- June 15 – “lockdown” period begins – US index adds & delete lists are considered final
- June 26 – Russell Reconstitution is final after the close of the US equity markets.
- June 29 – equity markets open with the newly reconstituted Russell US Indexes.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Chart of the Day
Top Stories on MTS Overnight:
- ‘The stock market doesn’t care about…
- Showdown: Law-and-order president versus protesters
- Chloroquine (a malaria drug) maybe: An Effective…
- Are Options Traders Betting on a Big Move in…
- 2 portfolio managers featured in ‘The Big…
- GOLD: ALL THAT GLITTERS…
- Hurricane-Related Scams
- This VIX Chart Should Blow Your Mind
- Week After September Quad Witch Down
- Why is Axon Enterprise (AAXN) Soaring Today?
- The potential for “spikes” on either side is obvious…
- Floor Trading in the 80s: A personal recollection by…
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3058.25 | Opening Print: 3033.00 |
| Low: 3008.00 | High 3059.00 |
| Volume: 395,000 | Low: 3027.00 After Open Early |
| ES Settlement: 3053.75 | |
| Total Volume: 1.5M |
S&P 500 Futures: Trump Threatens Military Deployment
The ES S&P futures struggled during Sunday night’s Globex session and after Monday’s 8:30 CT futures open. The ES traded 3033.00, sold off down to 3027.00 in the opening seconds and then traded up to 3037.50 at 8:32. After the uptick, the ES pulled back down to 3027.75, rallied up to 3044.25 at 8:51, sold back off down to the vwap at 3036.00and rallied all the way up to 3059 at 12:39 CT. After the high, the ES traded back down to 3051.50 at 1:28, had one last rally back up to 3058.00 and then dropped down to 3035.50 at 2:30. The Es traded 3050.50 as the 2:50 cash imbalance showed $332 million to sell, traded 3051.00 on the 3:00 cash close and settled at 3053.75 on the 3:15 futures close, down 3.5 handles or -0.11% on the day.
Our View
What’s With The Disconnect?
Our View:
The ES rallied sharply on Friday’s close only to be overshadowed by the street riots taking place across the US and the world and the S&P reacted in kind, it sold off 50 handles for the closing print. Despite the negative news the (ESM20: CME) short covered and then sold off after the open and chopped back up to take out the Globex high. My question is… where is the disconnect? I know back in the 1960s cities were closed and curfews were placed on the public. I personally remember the 1968 democratic riots in Chicago because it was on tv and my brother Mike (without my parents’ OK) went to Grant Park and it was total chaos. For days businesses were robbed and buildings burned to the ground.
While yesterday was the first trading day of June there was a total disconnect between the news and all the riots and the markets, almost like the S&P just didn’t care. When I said that to the PitBull he said the difference between the 1960s and today is one thing, the fed and its printing presses.
Our view, no one said this was going to be easy and it seems like over the last few sessions it’s actually gotten harder. As the ugliest rally in history continues so does the spread of COVID19 and the riots. In all honesty, I am shocked at how well the markets acted. 10 of 11 sectors rose yesterday with the financials and energy stocks leading the way. Our lean is to sell the early rallies and buy the midmorning pull back. It’s 8:00 PM CT and the ES sold off down to 3035.00 and is 3034 last. It feels like the futures are struggling.
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.
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.
No responses yet