Market Review
It’s been nearly a month since I’ve written for the MTS Opening Print. I spent much of June exploring the back-country and National Parks of Colorado and Utah while the ESU20 S&P 500 futures consolidated between 3000 and 3150. When I left, the ESU20 was flirting with the 3200s and as of Monday’s settlement, the ESU20 is only about 30 points lower. Monday’s move is significant because it is a bullish break above the 3000/3150 consolidation area.
If the ESU20 can clear 3150 (i.e. hold a retest of the area as support or move significantly higher), the ESU20 should attempt a retest of the 3220s swing high resistance this week. If the 3220s can be cleared, then the next stop is the February all-time highs around the 3350s. China’s recent declaration that they are moving past the coronavirus and will focus on rebuilding their economy may be the fundamental juice the ESU20 needs to reach new highs despite the growing record-high new COVID-19 cases plaguing the US.
The ES remains in an uptrend of high lows and higher highs. Clearing the 3220s would continue the bullish trend. The 50-day moving average has reached the 200-day moving average which is also a bullish sign.
There is a pronounced low-volume area centered around 3150 and it’s possible the ESU20 may settle in for a week or so filling in the low-volume area instead of moving towards new short-term highs.
Volatility, while spiking after the June 11 rollover day selloff, has settled back where it was at the beginning of June.
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.
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MiM
16-point range into the close from the 14:15 low to the futures close. No real signal was established in the pre-reveal MiM but the 15:45 candle let us know that the reveal was going to be bigger to the buy-side. The 15:50 retrace trade worked again yesterday.
Questions? Please email me: Marlin@mrtopstep.com
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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 quick as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).
While Florida and Texas tend to grab the headlines based on case counts there is plenty of concern to spread around. Today’s look is at Oregon which showed a surge of admissions over the holiday weekend and joins our concern list.
Texas deaths are also following the new surge as the 7 -day average is now 36, just 2 from the high of 38 established on May 15th.
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 stat.
Wear your mask!
Chart of the Day
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3172.75 | Opening Print: 3163.50 |
| Low: 3121.25 | High 3174.50 |
| Volume: 300K | Low: 3155.00 |
| ES Settlement 3171.25 Up 55.75 handles or +1.8% | |
| Total Volume 1.2 Million |
Monday’s S&P 500 (ESU20:CME) Recap
7/6/2020
The ES ripped on covering and traded 3163.50 on yesterday’s 8:30 CT open and sold off down to 3158.00 at 8:40 am. After the low, the ES traded up to the high of the day of 3174.50 at 9:00 and at 9:25 sold off down to 3155.00. The ES then rallied 3 handles, back and filled a bit and then rallied all the way back up to a lower high of 3172.25. The ES then sold back off down to a higher low of 3159.50 at 11:22, rallied back up to 3166.50 and then puked down to 3155.25 at 1:21. At 2:00 the ES traded 3159.25, traded 3160.00 at 2:30 and traded 3167.25 as the MiM showed between $800 million to $1 billion to buy. On the 3:00 cash close, the ES traded 3169.50 and settled at 3171.25 on the 3:15 futures close, up 55.75 handles or +1.8% on the day.
In the end, the ES’s overall tone was ‘overly’ firm. In terms of the day’s overall trade, volume was horrific at 1.2 million
DATA/HEADLINES: 9:00ET Fed’s Bostic speaks; 10:00ET JOLTS US Job Openings: 1:00ET 3 Year Note Auction, Fed’s Quarles speaks; 2:00ET Fed’s Barkin and Daly speak. The list of virus relief recipients include more than 88,000 loans for religious organizations, a number of investment firms, big-name law firms and some nonprofit groups.
TODAY’S HIGHLIGHTS: Global stocks ended a five-day winning streak as China’s equity rally slowed and data from Germany suggested the global economic recovery is still far off. The pace of new infections from Tokyo to Iran and Australia is raising concerns about another virus wave. Any vaccine would likely be limited in how long it can shield against infection, Anthony Fauci warned. Brazil’s President Jair Bolsonaro has undergone another test for Covid-19 after showing symptoms of the virus. Australia’s government warned citizens they risk “arbitrary” arrest in China following the detention of foreigners there on security grounds. The warning reflects heightened global tensions, and concerns in countries including the U.K., the U.S. and Australia, after China enacted sweeping security powers to crack down on Hong Kong.
EQUITIES: CorvusPharma Spikes 210% After Initiating Clinical Trial of Novel Immunotherapy for Patients with COVID-19. Regeneron awarded a $450M contract from BARDA for REGN-COV2. U.S. government awards Novavax $1.6 billion for coronavirus vaccine.
Today: ESU / SPX / DOW : Futures on all three major U.S. equity indexes fell after Monday’s rally lifted technology shares and the Nasdaq to record levels. The mayor of Miami-Dade announced he plans to re-close restaurants and gyms in the latest setback. Economic activity in parts of the U.S. is showing signs of leveling off amid a resurgence in coronavirus cases, according to Federal Reserve Bank of Atlanta President Raphael Bostic.
E-Mini S&P is down 0.8%, Nasdaq -0.4%, RTY -1.2%, Dow futures -0.9%. ES will be negative early below 3156/57 area (.382 retrace of the overnight session).
Our View
S&P Up 5 In a Row / VIX 25 to 28
While the ES was going up yesterday and volume was falling the VIX, which made an early day low at 24.92, rallied all the way up to 28.33. In most cases, this type of price action is negative.
Our view, with the ES up sharply over the last 5 sessions and the ES extremely overbought and approaching the big figure of 3200, several countries entering new COVID19 ‘lockdowns,’ my gut says we see some type of pullback. The ES has run a tremendous amount of buy stops and it may be time for some type of knockdown / reload. It’s 7:00 am and the ES traded up to an early high of 3184.00 on Globex and made a low of 3138.25 at 5:18 am and just traded up to 3154.00. I know it’s “Turn Around Tuesday” today but I’m still getting this sinking feeling. Our lean is, I can’t rule out buying some midday weakness but I think the initial pay is to sell the rallies. It could be time to run some sell stops. Everyone is too long and too complacent!
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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