S&P 500 Futures; A Long Year of Going Nowhere

2015 has seen some big ups and downs, but at the end of November the S&P is only up +2%. After the ESZ15 dropped over 14% during its August and September swoon, and started to recover the overall price action of the S&P. Whether it’s a big or a small drop has remained the same; sell off, make a series of higher lows, and then make a new high. During Friday’s shortened holiday session. the S&P futures (ESZ15:CME) closed at 2090.50, up +0.10% on the week, and 2% on the year. The Dow futures (YMZ15:CME) settled at 17801.00, down -0.01%, flat on the week and up .03% year-to-date. The Nasdaq futures (NQZ15:CME) settled at 4682, up +0.11%, down %0.10 on the week, and up 11% on the year. Here are some of the levels we will be looking at today in the ESZ15:CME:

As you can see the first resistance level at 2098.26 is just below the 2098.70 level I have been putting out where the next set of buy stops begins.

CRUDE REALITY

1 Day CL Renko 300 Delts Chart

Where is the disconnect? Not very often do you see crude oil heading toward the low end of its trading range and nearing a bundle of sell stops, while at the same time the ES on the upper end of its trading range and nearing a very long line of buy stops. Where is the disconnect? Below are some of the levels we will be looking at today in the CLF today. We are not sure when the CLF15 will take out the downside sell stops but we don’t think it’s that far off.

MrTopStep may be a bull, but he is not a fool. At the end of 2014 the S&P started to stall. The 7 year bull market was starting to waver. Despite closing up 11.5% in 2014, the S&P rallied in the first quarter of 2015, but at the end of March the mutual funds turned into MOC ‘sellers’ and from that point on all the major rallies were suspect. All the talk about hiking interest rates finally caught up to the S&P, and without the constant buying of the mutual funds, the markets lost leadership. During the rotation out of stocks, the botches became a prime target. Late July and August were also when crude oil started to fall under $40.00s, and then China’s shrinking economy added to its woes. With the exception of the big jump in volatility during the August to September the S&P had been stuck in a 6% trading range from its May high to its August low.

BUSY WEEK AHEAD

In Asia 9 out of 11 markets closed lower (Shanghai Comp +0.26%), and in Europe 8 out of 12 markets are trading modestly higher (DAX +0.95%). The last trading day of November and the first four days of December see a big pickup in economic activity and fed speak. This week there are a total of 25 economic reports, 10 T-bill or T-bond auctions or announcements, 9 Federal Reserve Bank presidents speaking, Janet Yellen speaks and the November jobs report of Friday. Today’s economic calendar includes 2-Yr Note Settlement, 5-Yr Note Settlement, 7-Yr Note Settlement, 10-Yr TIPS Settlement, Chicago PMI, Pending Home Sales Index, Dallas Fed Mfg Survey, 4-Week Bill Announcement, 3-Month Bill Auction, 6-Month Bill Auction, and Farm Prices.

LAST CALL FOR NOVEMBER 2015

Our View: Today is the last trading day of November and all I have to say is where did the year go? It’s been a decent year for trading the ES but despite all the ups and downs the S&P is up only 2% year to date. That said the S&P has also been extremely resilient. Our view remains unchanged; we still think the ESZ15 runs the upside bus stops and we still think that happens sooner than later. While we think higher prices overall we also can’t forget about the last trading day of the month ‘Walk Away’ trade. Our view; you can sell the early rallies and buy weakness but just wait for the ES to pull back and buy it.

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

• In Asia 9 out of 11 markets closed lower : Shanghai Comp. +0.26%, Hang Seng -0.33%, Nikkei -0.69%
• In Europe 8 out of 12 markets are trading higher : CAC +0.64%, DAX +0.95%, FTSE +0.03% at 6:00am CT
• Fair Value: S&P -2.11 , NASDAQ -0.98 , Dow -23.10
• Total Volume: 653k ESZ and 1.1k SPZ

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