Premium OP: Dog Days of Summer

by Danny Riley
on August 6, 2020

Market Review

GLOBEX

(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 3321.75Opening Print: 3311.50
Low: 3292.00High 3323.25 @ 10:15CT
Volume: 250KLow: 3311.25 @ 2:45 CT

ES Settlement 3315.25

Total Volume   1.085 Million

S&P 500 RECAP – Trade Date 08/05/ 2020

#ES Money Maker Chart

S&P 500 Respite 

Wednesday’s trade can be characterised by one word, slow. After grinding higher in the overnight session the S&P 500 futures opened Wednesday’s regular session at 3314.25 and on the open, made what would hold for the morning low of 3311.50 before climbing to the high of the day at 3323.25 just after 10:00. The rest of the morning saw the S&Ps trade in less than a 10 handle range until the final half-hour of the regular session when the futures would print a new low of the day at 3311.25. However, in the closing minutes, a rush of buy orders would push the index back above the open to 3322.75 before settling the day at 3315.25, up 15.50 handles on the day or +.45%.

In terms of the ES’s overall tone, it was firm all day. In terms of the day’s overall trade, the volume was low at 1.085 million contracts traded.

Economic Calendar

Closing Prices

In the Tradechat Room

MiM


All the volatility in the day came in the last couple of hours. Our MiM wasn’t that active except for a small sell early and into the MOC itself at the 15:50 candle which was eagerly bought and made a 6 handle move.

Questions?  Please email me: Marlin@mrtopstep.com

Get the skinny when we get it:  Join the MiM. 

Covid-19

Top 10 Worst
Top Ten Best

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).

California and Florida are making great progress in knocking down their daily new cases. Texas is in a bit of a struggle.

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.

Not yet in the big 3. We still have not seen a downturn in daily deaths as they stubbornly head higher despite a slow down in new cases. Florida’s peak in new cases was in mid-July and we are 20 days beyond that now. Our expectation had been that we would see a slowing of deaths about 18 days past peak. California is a week behind Florida on the curve and Texas is in between those.

We are at the end of the week and the big numbers should be coming out over the next 3 days which will establish how we feel about next week.

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.

YesterdayYesterdayTodayToday
StateCasesDeathsCasesDeaths
Florida9,446 / 5,409217 / 2259,956252
Texas9,042 / 8,706313 / 2368,80084
California8,755 / 5,295197 / 20210,197194
New York715 / 6496 / 477713
Yesterday’s number are the over-under number / actual. An actual that is greater than the over-under number will send the 7 day average higher (not good) a lower number will send the 7 day average lower (good).
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 masks!
Stay Home!

Chart of the Day

Goldman Sachs

Top Stories on MTS Overnight:

Our View

Dog Days of Summer

The dog days of summer run from mid-July to the middle of August. It’s historically a time when many traders cut back their trading and volume drops as kids get ready to go back to school. But this year is not your normal ‘dog days’. After a 32% drop due to the COVID19, the S&P has rebounded and is just 2 1/2% off its all-time high. My concern is that the dog days may last a lot longer this year! 

Our view, there isn’t much to say that we don’t already know. I agree with TradeDave that the bus is getting too full but with the low volume and the second stimulus package coming it may be a hard sale. Everyone has been talking about 3330 but I think the ES could be heading to 3350-3360. I am not saying today but when the government does come to terms on the stimulus package the rip could come hard and fast. Today is more than likely to be another slow day ahead of Friday’s jobs report. I know the ES is overextended but that doesn’t seem to matter. Our lean is to take a go-slow approach. I know selling the gap up didn’t work yesterday but maybe it will today. Ideally, I want to continue to follow the trend and buy weakness. 

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

Did you know that your premium membership gives you access to our Market Vitals? Click on the image below and get today’s key levels.

Click to access today’s values

As always, please use protective buy and sell stops when trading futures and options.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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