Market Review
Price opened gap down and started to rise but the FANG securities were not the saviors the market hoped they’d be.
Yesterday’s rising star NFLX started to see volume come on its rise. By 9:33, massive volume entered and price went smack down through the previous day’s high, through close and down through daily and pivot way past the halfback.
As the general market was on the rise, FANG securities and its star were slip-sliding away to find their low of the day. GOOGL was the weakest of its brothers. Trading way past the low of the day below the low of the day.
Most groups/securities traded around the close and below of their previous day with the exception of a few. Retail was the weakest whilst Oil and Gas were the strongest.
The Emini was quick to get a bid below the low of the previous day but was quick to take on selling pressure as its price neared the close and daily pivot.
It was an S2H day, so it was natural to see price find its high near the 10:30 marker then quickly lose it during the lunchtime SLOG. The day ended weak as price traded up on increased volume.
Looking Forward Friday, June 19, 2020
They keep raising the stats of the COVID and the market keeps whipping around. Responding like Plavos dog when it pleases them. By my eye, I’m seeing selling on the rallies, selling on the open and selling on the close. These are deep pocket participants. It could take a while for the true trend to emerge. Bulls defended the low of 3065 handle, will it be the same the next time price re-visits?
As I write this Globex is trading 3117, higher than yesterday’s high. Price has moved up overnight on little to no volume and CASH reset value the next day. Today is Friday, triple witching day and Russell is rebalanced next Friday.
A lot to keep late to the party stay at home traders “Robbing Hoods” shiny little pretty attention on.
We had a good week this week. Our subscribers have been very lucky with the levels given: 96 points Monday, -6 Tuesday, 24 points Wednesday, 11 points Thursday. Total for the week 125 points, that would be $6,250 on 1 lot and $18,750 on 3 lots.
That’s due to the volatility that crept back into the market. I’ll be the first to say, it does NOT happen every week. When it does it’s a beautiful thing! I would love for you to join us. If have not taken the time, now would be a great time to subscribe
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MiM
Sell ’em from 14:00 to 15:00 and then buy ’em back into the close. MiM had breadth on the sell-side (no size) until around 15:25 when it had eroded to a more neutral setting. The 15:50 reveal of -256M was taken as positive.
Today is OPEX and there should be decent size today on both the open and the close.
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.
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3120.00 | Opening Print: 3104.00 |
| Low: 3084.50 | High 3109.25 Early |
| Volume: 499,000 | Low:3087.50 After the Open |
| ES Settlement: 3097.90 | |
| Total Volume: 1.75 M |
S&P 500: ‘Uncertainty’
The ES traded down to 3064.50 on Globex and traded 3104.00 on yesterday’s 8:30 CT futures open and then dropped 5 handles down to 3080.75 and basically fell into a big back and fill pattern pushing the ES back up to 3109.26 at 10:00 am CT. After the push up the ES sold off 20 handles down to 3089.75 at 11:00 and then rallied up to a lower high of 3106.00 at 1:00 CT. After the rally, the ES sold off down to a higher low at 3092.50 and rallied up to another lower high at 3104.00 at 1:33. The ES traded 3094.00 at 2:00, traded 3092.75 at 2;20 as the MIM showed over $700 million to sell, traded 3097.25 on the 2;50 cash imbalance as the final MIM showed $775 million to sell. On the 3:00 cash close, the ES traded 3104.50 and settled at 3097.90 on the 3:15 futures close, down 9.2 handles or -0.25% on the day.
In terms of the ES’s overall tone, the early pullback led sideways to a higher low volume grind. In terms of the day’s overall trade, volume was LOW with 1.68 million ES traded with 499k coming from Globex.
Our View
Major ‘June Quadruple Witching’ Could Produce Unprecedented S&P Volatility
Our View:
With all the records moving over the last 3+ months every investor from the big global pension funds to the little guy sitting at home trading equity options has seen a surge in trading and positions. Today the S&P is set to see $1.8 trillion worth of options contracts expire. It is the third-largest non-December options expiration in history and the concern is it could fuel massive moves today. Say a NY trading desk has purchased 15,000 the June XYZ calls at 100 and they are trading 800 at 810. Before the end of the day or before the option expires the trader has the right to purchase the stock at $100.00, roll the position, or let the position expire which will cause a big spike in trade and volume late in the day. Most traders are expecting some large movements in the S&P 500 today.
Our view, lots of talk about increased volatility yesterday and today. My guess is that with so many options expiring tomorrow the ES will rally tonight and tomorrow. In most cases, it stays busy in the first hour and a half and the last forty-five minutes of the day. Our lean is for pullbacks and then wait for the last hour that should see a large buy imbalance.
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
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As always, please use protective buy and sell stops when trading futures and options.
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