Market Review
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 2920.00 | Opening Print: 2850.50 |
| Low: 2830.75 | High 2857.75 |
| Volume: 300,000 | Low: 2883.25 |
| ES Settlement: 2821.00 Down 61.5 handles or -2.13% | |
| Total Volume: 1.84 M |
S&P 500 Futures: End Of The Month And Beginning Of The Month Selling
There is no way anyone can keep up with all the news all the time. It’s just too hard to do, you put your head down for a minute or go to the bathroom and some crazy headline hits and the S&P 500 futures (ESM20:CME) are ripping or dipping big. Volume has fallen and the VIX that traded above 82.50 and sold off under 31 on April 29 held above 31 on April 30th when the futures were starting to act weak. The VIX was not breaking down when the ES was trading above 2950, that was the clue to Friday and Monday’s weakness.
The ES traded 2850.50 on Friday morning’s 8:30 CT futures open. After the open, the ES rallied up to 2857.75 at 8:32, traded back up to a lower high at 2853.75 at 9:52 and then started to sell-off. At 11:42 the ES ‘double’ bottomed’ at 2812.75, rallied up to 2824.00 then made a new low by 2 ticks at 2812.25. At 1:27 the ES was up to 2824.75.
At 2:00 CT the ES traded 2821.00, traded 2823.00 at 2:30 and traded 2821.50 as the 2:50 cash imbalance showed $1 billion for sale. On the 3:00 cash close, the #ES traded 2823.50 and settled at 2821.00, down 61.5 handles or -2.13% on the day.
In terms of the ES’s tone, the selling that started Friday carried through into Sunday night’s Globex session. In terms of the day’s overall trade, a total of 1.64 million ES traded with 300,000 from Globex making total volume 1.34 million on the day session.
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Decent size on the MIM as 1B shown to sell and down we went after a rally into the MOC reveal. Like the weather, if you don’t like the direction, wait, it will retrace and unlike yesterday’s close we rallied back to close the short for the weekend.
Questions? Please email me: Marlin@mrtopstep.com
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Our View
Oracle of Omaha
Tens of thousands of people descend on Warren Buffett’s Berkshire Hathaway’s annual meeting every year but instead of flooding into Omaha to hear what the ‘Oracle of Omaha’ had to say it was all done onstage in an empty downtown arena for a live streaming event due to the coronavirus pandemic.
Here is a recap of Buffett’s advice:
- Buffett still believes in stocks for the long term and that America in 2020 is in better shape than it’s been at any other time in its history, and he believes that investors who put money in stocks for the long run now will be amply rewarded.
- Buffett said S&P 500 index funds are fine if you don’t want to buy individual stocks.
- Buffett doesn’t want people to pay for financial advice you don’t need.
- Buffett thinks bonds are not as good an investment as stocks.
- Buffett admits a mistake with airline stocks
There is no doubt that hearing Buffett’s words can reassure investors but Buffett has not been charging into new stock positions, in fact he has moved more into cash. While I agree with everything he said above what he is not saying is that there are troubled waters ahead for the stock market. I don’t know if the current sell off will lead to a retest of the 2174 low right away but I do think it’s coming.
Our view, the ES is down 36 handles at 2781.00 at 8:15 PM CT Sunday night. The low is 2771.00, that’s down 194 handles in 2 1/2 sessions. I don’t like the price action but if the China PMI comes out bad tonight I expect the ES to make new lows. Additionally, the DAX was closed for the May Day holiday and in order to catch up with the S&P, it should be down 4% to 5%. It all sounds kind of bad but my concern is that we have not seen any beginning of the month buying and with the spoos down so much so fast I can’t rule out buying a sharply lower open. My guess is the ES short covers before today’s 8:30 CT futures open. Our lean, I am somewhat pessimistic, I just don’t know how much lower the ES can go before we see a rip. 2750- 2740, 2710 and 2680 is a key level.
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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