Market Review
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3393.75 | Opening Print: 3390.00 |
| Low: 3383.25 | High 3395.75 |
| Volume: 180,000 | Low: 3365.50 |
| ES Settlement 3372.50 | |
| Total Volume 1.34 Milliion |
S&P 500 RECAP – Trade Date 08/19/ 2020
#ES Money Maker Chart
Fed Rains On ES New Highs
After trading in a 10.50 handle sideways range in the overnight session the S&P 500 futures opened Wednesday’s regular trading hours at 3390.00 up 3.75 handles, traded down to a 3385.50 morning low in the opening minutes and then rallied up to 3395.75, for the high of the day just before 11:00. From there, the S&P’s began to reverse late morning, trading down to 3389.75 just before noon.
After an afternoon trade up to 3395.25, the retest failed and the ES began to sharply sell, as the index futures made their way down to 3376.50 just before 1:30, and then after a 10.75 handle rally to 3387.25, the index continued selling late in the day pushing down to 3365.50, a 30.25 handle pullback. In the final minutes of the session, the markets rallied up to settle the day at 3372.50, down 13.75 handles or -0.40%.
In terms of price action, buyers of the early lows were modestly rewarded, while afternoon sellers had the most opportunity. In terms of volume, the day was a modest 1.34 million contracts traded, the highest in five sessions.
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Question from a subscriber: The MOC reveal at 15:50 was 3B to sell, why did price move higher?
Answer: Initially the price dropped 3 points on the reveal but quickly was bought back as the sellers from 15:45 closed very successful shorts into the MOC. The MiM was signalling a short setup at 15:30 when price was at 3378, by 15:35 we had a stronger MIM to the sell-side showing growth and the market began to sell. When the reveal was displayed we were down about 12 points from the 15:30 handle so even though the reveal was large, the drop for the price occurred before the reveal. Another time to watch is that 15:55 bar which for the ES has become the largest volume bar (5mins) of the day. Our selling imbalance was cut down to 2.2B at that point. There was a lot of buying post the 15:50 reveal. Low volume days are sometimes tricky to trade on the MiM.
estions? 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).
Rinse, repeat. Florida continues to gain downside momentum approaching 4K cases a day from their 12K high. California moves lower, Texas has a straight line in the sand and doesn’t seem to want to move.
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.
Like the comments above for new daily cases, all 3 states beat their under numbers and show a down-turn on their 7-day averages for daily new deaths. Proof for a trend should begin to be established over the next few days.
Over / Under
These are the over/under numbers for today. 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 | 8,109 / 4,115 | 213 / 174 | 6,236 | 149 |
| Texas | 6,200 / 7,024 | 324 / 309 | 6,755 | 255 |
| California | 11,645 / 6,164 | 180 / 181 | 7,085 | 160 |
| New York | 528 / 631 | 7 / 6 | 737 | 10 |
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
Fed; Economic ‘Uncertainty’
Our View:
Despite APPLs market cap reaching $2 trillion yesterday, the markets didn’t like hearing what the Fed had to say. While the S&P 500 cash reached its first record close since February, Federal Reserve officials highlighted the uncertainties facing the economy. The S&P has now surged more than 50% from its March lows and is now up 5% YTD. After a strong rally in April and May, the index has crawled higher over the last several weeks with most of the move up done on the overnight session, Globex. The ES ‘chopped’ between small gains and losses for much of yesterday’s session then lost momentum after the Fed released minutes of its July meeting that showed officials grappled with how to spur growth amid low rates and rising virus cases. The Fed said the U.S. needed greater support recovering from the coronavirus pandemic but were hazy about when they should deploy their tools. Fed officials expressed limited enthusiasm for yield curve control, a policy that typically involves targeting rates and pledging to buy longer-term bonds.
Our view, it has not been hard to see the daily struggles the ES has had over the last few weeks as it tried to make new all-time highs. The ES was less than 2 handles away from a new all-time high but once the Fed headlines hit the tape it was bye-bye new highs and hello new daily lows. Like many, I have been toting 3420 but it just wasn’t in the cards. At least to me, it seems like the Globex overnight rallies have taken a lot of the ES’s day trade buying power away and only rips after the ES drops. If the ES opens flat it pretty much remains that way. Our lean, the reason I asked how many days the ES has closed high in August was that with expectation so high for ES 3400-3420 it doesn’t surprise me at all that the ES fell so quickly. Our lean. It looks like the ES can work lower but I’m unsure how far it can go before it starts bouncing higher again. One thing is for sure, the ES ran a lot of buy stops and the reversal pushed the futures down into a lot of sell stops. Ideally, I want to get a look at the price action but I don’t think we see more than a two-day decline.
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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