Market Review
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
There were about 20 points of action on the closing two hours yesterday with selling kicking in at 14:30. Buyers returned the favor at 15:00 while the MiM was an anemic 82M to buy. Much discussion about the MiM showing no direction or velocity into the close, at least where MOCs were concerned. While the 15:50 reveal did show a small sell-side of -357M which was high by a strong sell program, that candle was bought back by a series of small buy programs.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Covid-19
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).
Dakotas. I know very littel about South and North Dakota but the southern one showed up on the best list today and prompted the question: where is the northern brother?
South Dakota had a strange double-peak infection in April and May. In fairness, the state is sparsely populated and both Dakotas have only about 800K citizens. I would think it makes for an interesting comparison, but not sure at all about the conclusions. Today is just an observation with a question posed.
South has certainly flattened the curve and doing a great job maintaining while the north is at their all-time daily new case rate.
Both states have Republican governors, not sure about their mask stand. If anyone can shed light on why one is doing well while the other is struggling, I would love to add the info. marlin@mrtopstep.com
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.
Florida continues to see increasing growth rate while California has turned down for the week. Texas sits right in between. Whatever California is doing, surely Florida and Texas should follow. Florida’s death growth is exponential, that is the curve is not flattening it is accelerating, and the worse of all possible outcomes so now we are not looking for a downturn or a lowering of daily deaths in Flordia, we are looking for a slower growth rate in the number of daily deaths. That is a big difference between Flordia and California.
For all three states, today’s over/under should help us discern any trend change. We want the line at least flattened and for that to happen the numbers have to come in as below:
Over / Under
These are the over/under numbers for 7/16/2020. 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.
Yesterday’s over/under numbers and actual are also in the table.
| Yesterday | Yesterday | Today | Today | |
| State | Cases | Deaths | Cases | Deaths |
| Florida | 8,935 / 13,965 | 120 / 156 | 11,433 | 92 |
| Texas | 9,782 / 10,291 | 105 / 129 | 9,765 | 95 |
| California | 7,031 / 8,544 | 149 / 118 | 7,798 | 140 |
| New York | 584 / 769 | 20 / 11 | 786 | 9 |
Use today’s number 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 mask!
Chart of the Day
Top Stories on MTS Overnight:
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3228.50 | Opening Print: 3197.25 |
| Low: 3188.50 | High 3212.00 Late |
| Volume: 351K | Low: 3190.25 |
| ES Settlement 319.25 down 26 handles or -0.81% | |
| Total Volume 1.4 Million 500,000 lower than Wednesday |
S&P 500 RECAP
A Texas Style LOCKDOWN; Chicago’s Next
If there was ever an Opening Print that was short and sweet it will be today. Yesterday the ES traded 3197.25 .00 on yesterday 8:30 futures open, traded up to 3200.50 at 8:32 and then sold off down to 3190.50 at 8:35, traded back up to the vwap at3201.50 at 8:39. After that the ES traded in a narrow trading range making 18 separate ‘rips and dips between 3190 to 3207 until the ES sold off down to 3191.25 after a headline hit that Texas Gov. Greg Abbott warned of another possible lock down if people don’t start wearing masks. After the sell off the ES rallied back up to a new high at 3212.00 at 2:38 CT. The ES traded 3206 as the 2;50 cash imbalance showing $400 million to sell, traded 3205.00 on the 3:00 cash close and then sold back off down 3193.50at 3:14 after NETFLIX beat its forecast for new subscribers as it named programming chief Ted Sarandos co-chief executive. The ES settled at 3195.25 on the 3:15 futures close, down 26 handles or -0.81% on the day.
In terms of the ES’s overall tone, the rotation out of tech into the Dow and S&P continued.In terms of the day’s overall trade, volume was light at 1.4 million contracts traded.
Our View
Economics? What Do I know About Economics?
I started writing today’s view about the retail sales number and then I thought, what do you know about economics!? In reality, I do understand many of the weekly and monthly economic reports but it doesn’t seem to matter to the S&P and the Nasdaq Composite that the US economy is falling apart. My fear is that ‘we haven’t seen anything yet’! As the summer rolls into the fall and elections heat up the word of the day is going to be; VOLATILITY. It’s here now and will continue to be. Yesterday the S&P was sluggish and volume disappeared. Despite the weakness, low volumes tend to favor the upside and based on the ‘price action’ of the Nasdaq it may be overdue for a rip. I know today is the July expiration and we are heading into the weekend and cases of COVID-19 are going to go through the roof but when you look at the ES price action yesterday it just could not break, 3190 held like a rock.
Our view, its 8:15 pm and the ES just traded up to 3206.50 and is falling back. I do not think the ES is out of the woods yet but when the selling in FAANG stops the NQ is going to RIP higher again. As for this morning, if the ES gaps down 10+ handles my lean would be to buy the open. If it gaps higher I would look at selling the open but ideally, I want to buy the dips with tight sell stops. That all said, if the ES is actually heading south I am not going to stand in the way of it.
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.
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