Think you know a lot about the S&P futures? Well, jump in the bathtub…
On Thursday, the last trading day of April the S&P e-mini futures sold off 29 handles from the prior close to the low of the day. Part of the selling was weakness in Asia and Europe and the Russell rebalance but after everything was “paired” off on the close the (ESM15:CME) rallied 8 handles off its 2070.25 low to settle at 2078.90 setting up Fridays rally. The other part of the sell of it that it was backed by the largest volume in many weeks, just over 2 million contracts traded versus the 1 million to 1.2mil a day the ES has been seeing over the last several weeks.
Friday’s trade, the first trading day of May, was a complete reversal of Thursday’s trade. While the futures broke out of the 2080 – 2120 range we have been talking about we think Thursday’s sell off and Fridays bounce back are a perfect example of the PitBulls analogy that the S&P 500 futures movement is comparable to “water in the bathtub”… Push the water one way and then push it the other.
While it is clear to see that there is global liquidation going on and the S&P has been feeling its effects, Fridays rally took back all of Thursday’s losses and more.
On yesterdays close the ESM15 was up 22.7 handles (points) vs. Thursdays 20.10 handle drop. Run the sell stops / run the buy stops, just like moving water around in the bathtub. Despite the somewhat negative price action we have been seeing I still think the short term risk is to the upside.
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