The ES traded lower on Globex most of Thursday night and into early Friday morning and then started to uptick before Friday mornings 8:30 futures open. If you have purchased a copy of the Stock Trader’s Almanac to add to your trading “toolbox” (as I have suggested many times) you know that December’s option expiration has a solidly bullish history. In fact, the week of options expiration and the week after have the most bullish record of all quarterly option expirations. Since 1982, DJIA has advanced 28 times during December’s options expiration week with an average gain of 0.55%. As many of you know, I have been very bullish on the S&P 500 and I remain that way.
After the opening at 3113.50 on Fridays 8:30 CT futures’ open, they made an early low at 3208.50 and then ‘took off’ to the upside and traded up to another all-time contract high at 3229.50. Before 2:00 the MiM started to show??? And end up x to buy or sell and settled at 3224.25 on the 3:15 futures’ close, up 12.75 handles or +0.40% on the day. But I think the key to the entire day came from the MiM just before the open that was showing a whopping $6 billion to buy.
In the end, despite the big rally, it was a fairly slow trading day. In terms of the market’s overall tone, it was very firm. In regard to the day’s overall trade, volume was steady but not large.
Economic Calendar
MrTopStep: For Traders By Traders
David Zimmer
The S&P futures (ESZ19: CME) closed on Friday at 3221.22, a new all-time high, two points below its opening print of 3223.33, after closing Thursday at 3205.37. Its minuscule nine-point trading range (3216.03 – 3225.65) gave traders a reason to take off early before the end of the week rally. Danny’s commentary has been right on target; buying the dips with a requisitely placed stop. I do not see anything but support for Danny’s position in the three attached charts but know; I’m still looking for the opposite; an entry point to go short. Never fight the tape; it usually wins.
Orange Juice Futures
There is an out-of-nowhere that I would like to bring to your attention today, Orange Juice. You know the “juice” product that reacts to weather or disease. It’s not cold outside but another “reactor” has been identified and taking hold; more than 50% of juice used for the frozen concentrate underlying this contract comes from Brazil. Coffee, another commodity dependent upon the strength or weakness of the Brazilian Real, has made its initial move, time for Orange Juice to jump on board.
That’s just what we did; got long 10 (OJ 01-20) at 98.00 expecting what we got; an upward piercing of the 20-day moving average on volume. This isn’t rocket science folks; a little experience thrown in for good measure; but we do the same thing week in and week out. Look for commodities near major highs and lows, apply our analysis and act.
Through the end of the year you can buy an AMS Lifetime License for $1,497.00 (regularly $2,997.00). Keep in mind that as of the end of the year AMS will no longer offer Lifetime Licenses (Annual License @ $997.00) so take advantage of this offer. We all at AMS and MTS appreciate your business and look forward to earning it every day. If you want to hear more directly from me let me know at david@amstradinggroup.com.
Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight as time allows. In the interim thanks for reading what we post. Enjoy your trading week.
Closing Prices
Our View
The Gift That Keeps Giving: S&P Up 28.50% YTD
2019 has been a banner year for the S&P and the stock market as a whole and I do not think the upside party is over. The positive stats going into last week’s December quadruple witching were astounding and now the next positive historical stats come in the last five trading days of the year, it’s called the Santa Clause rally. Today it’s normal to be up but Tuesday has the S&P up 8 of the last 11 occasions. This rally comes to Wall Street ‘nearly’ every year during the final five sessions of the year and comes with an average gain of +1.3% since 1950. The last trading day of the year has seen the Nasdaq down 15 of the last 18 occasions and the S&P up 19 out of the last 27. The first trading day of the new year is when small caps are purchased and the Russell 2000 has been up 7 of the last 10 years. Add it all up and it spells one thing… HIGHER PRICES!!!
I know, with the S&P up so much how can the S&P continue to rally? The simple answer is that there is so much money moving into stocks at year-end that it may be next to impossible to stop the upside burst. The CME and the S&P are open today, have an early 12:15 close on Tuesday, and are closed all day on Wednesday for the Christmas holiday.
In the Tradechat Rooms
The MiM
An OPEX MiM, which is usually large and often ignored. As large trades are wound up with the OPEX we find a large opening and closing imbalance. Some may hear that 3:50 pm number of 7B to buy and hit their button not realizing that Opex 7B is really not that interesting.
HFT Alert
Our programs were fairly active on Friday’s close. Mostly around the close with jus 5 programs detected before 2 pm and 12 in the final two hours with the capper coinciding with the 3:50 pm MIM reveal.
If you have questions, email me marlin@mrtopstep.com
Video of the Day
Market Vitals Technical Analysis
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.
No responses yet