The S&P 500 futures (ESU17:CME) rallied on Mondays close, rallied after Globex opened, and rallied during Monday night’s Globex session. I told the PitBull that the ‘tech sellers were stepping off the gas pedal’ going into the fed’s two day meeting.

It was a much slower day than the previous two trading sessions. The (ESU17:CME) traded as high as 2433.50 around 3:30 am, sold off down to 2429.50 at 7:20 am, and opened at 2423.75 on the 8:30 open. 11 minutes into the day session a high was made at 2436.00. The ESU then sold off under the vwap, and just after 10:00am cst made its daily low at 2428.75. The next move was up to 2435,50, then a pull back and double bottom at 2433.75, followed by a pop up to 2437.75 at 12:40. After another pull back to 2434.50, the ESU popped again, and made a new high by 1 tick at 2438.50 at about 1:10 CT.

The Nasdaq (NQU17:CME) made an early low of 5716 at 10am, then chopped up and down through the vwap, making one last low 5742.25 around 11:30, before shooting up to 5757.25.

I really think I was right about the tech sellers letting up during the fed meeting. After making the high, the ES went quiet for the next hour, and stayed in a tight 2 handle range (2435.50 to 2437.50). The early MiM came out showing $505 million to BUY, and paired back to $227 million to buy at 2:15. At 2:37, the ES made a new high at 2439.25, and then pulled back as the MiM buy side started to shrink. The imbalance ended up showing $80 million to sell, but after the 3:00 cash close, the ESU traded back up near the highs of the day.

In the end the markets put on a decent performance. Overall volume was low, but the tone improved.

While You Were Sleeping

Overnight, equity markets in Asia traded mixed, but with a slight bias to the upside. In Europe, all majors markets are currently trading higher, led by the DAX, which is up +0.93%. In the U.S., the S&P 500 futures opened the globes session at 2438.25, and traded lower for most of the Asian session, finding a low at 2435.00 around 11:00pm cst. As the Asian markets closed, and the European markets opened, the ES began to catch a bid, and printed a high of 2441.25 a little after 6am cst. As of 6:30am cst, the last print in the ES is 2440.75, up 2.75 handles, with 153k contracts traded.

In Asia, 6 out of 11 markets closed higher (Shanghai -0.74%), and in Europe 12 out of 12 markets are trading higher this morning (FTSE +0.56%) Today’s economic calendar includes MBA Mortgage Applications, Consumer Price Index, Retail Sales, Business Inventories, EIA Petroleum Status Report, FOMC Meeting Announcement, FOMC Forecasts, and the Fed Chair Press Conference.

Our View

It should be quiet for the first part of the day. According to the CBOT’s fed funds, there is a 96.6% probability the fed will raise interest rates 1/4 of a point.

http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

What does that mean for the index markets? I think it means higher prices. Our view is to buy weakness. The ES made a low at 2428.75 yesterday, and that is pretty close to a 10 handle pull back off the high. One thing that could be a small concern is that the S&P cash study (see link below) shows today as being the weakest day of the week. You can take it from there.

Download the S&P cash study for the June expiration here

PitBull: CLN osc -15/-8 turns down on a close below 4452, ESM osc 3/13 turns upon a close above 244198, VIX osc 8/-6 turns down on a close below 1054.

Market Vitals for Wednesday 06-14-2017

[gview file=”https://mrtopstep.com/wp-content/uploads/2017/06/Market-Vitals-17.06.14.pdf”]

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

Join Marlin Cobb and Neils Koops for a FREE WEBINAR Saturday, June 24th at 10:00am cst. Learn all about trading the close with the MrTopStep Imbalance Meter (MiM), and get some insightful tips on maximizing Investor RT charting software. Hope to see you there!

Sign Up Here

• In Asia 6 out of 11 markets closed higher: Shanghai Comp -0.74%, Hang Seng +0.09%, Nikkei -0.08%
• In Europe 12 out of 12 markets are trading higher: CAC +0.77%, DAX +0.93%, FTSE +0.56%
• Fair Value: S&P -2.39, NASDAQ +7.47, Dow -50.13
• Total Volume: 1.9mil ESU, and 22.9k SPU traded