Things have quieted down on the trading floor over the last few days. The bond market is not as volatile as it was, and the S&P was flatlining for most of yesterday’s trading session. The concern that Janet Yellen may make some type of market moving comments just never came about, and that left the S&P futures stuck in a 2 to 3 handle trading range for most of the day.
There is not a lot of sense in going over what happened in the S&P, because the truth is, nothing happened until late in the day when the ESU15 finally sold off down through 2100.00 to 2095.00. The ESU15 looked weak, and the MiM, which started out showing small to buy, ended up showing over $650mil to sell, with the actual MOC coming out sell $ 700mil. Nevertheless, the futures rallied all the way back up to 2104 on the 3:15 futures close. For the first 6 hours, the ESU15 was stuck in a 2 to 3 handle trading range. In the last hour of trading, it dropped 8 to 9 handles, then proceeded to rally 9 handles off that low.
I am going to keep this light. Like the S&P, or don’t like it, it’s just too close to the upside buy stops not to run some more. The ES hit out the sell stops under 2100 yesterday. Who’s to say they don’t go after the buy stops above 2108.70 up to 2112.00?
THIN TO WIN
In the end, volume is continuing to drop, and I am not sure what’s going to get it going again. I know China is in bad shape, but so are Spain and Greece and Italy, though it isn’t much reported. Reuters reported yesterday that Rome is in a state of absolute decay, with the Mafia controlling much of the city’s government. I think it’s always going to be like this, moving from one global credit crisis to the next. My worry really isn’t China, it’s what happens when the U.S. finally rolls over. That is when the rest of the world will go for the ride.
In Asia 8 out of 11 markets closed higher, and in Europe 12 out of 12 markets are trading higher this morning. Today we have another busy economic and earnings schedule starting with Jobless Claims, Philadelphia Fed Business Outlook Survey, Housing Market Index, Janet Yellen speaks, EIA Natural Gas Report, 3, 6, and 52 Month T-bill Announcements, 10-Yr-TIPS, Treasury International Capital, Fed Balance Sheet, Money Supply and earnings from C, GOOG, EBAY, GS, UNH, MAT, AMD, DPZ, SHW, BX, PM, BBT, KEY, SLB, PPG, MTB, WBS, CTAS, PBCT, CE, FRC, and MTG.
S&P 500 Futures Up 5 in a Row
Our View: Well, it was not much of a selloff, was it? The Fed chair is testifying, but carefully measuring what she says, so it’s understandable that a lot of traders are on the sidelines. Today is the second day of Yellen testimony, and it could move the markets more than yesterday, but not by much. Wake up and smell the coffee, traders! People are taking time off from this mess. The VIX got as high as 19, and now it’s back down to 13. I think it will remain low. Our view is to get a look at the early price action. Yesterday I sold 2106’s, and did ok, but I got impatient and covered everything before the late dump. I got bored. I should have just left my stop in, I had a 2098 bid working. That’s why it’s so important to push back from the screens when you have a good idea and trust your method to work. I’m looking for buy stops from 2108.70 to 2112.00.
I wrote this last night, and the ESU15 ran the buy stops up to 2113.50 overnight. All I can say is, the S&P looks higher, but it’s approaching some big resistance at the 2118 to 2120 level. Keep in mind that 2126.25 is the e-mini contract high.
As always, please use protective buy and sell stops when trading futures and options.
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In Asia 8 of 11 markets closed higher : Shanghai Comp. +0.46%, Hang Seng +0.43%, Nikkei +0.67%
- In Europe 12 out of 12 markets are trading higher : DAX +1.60%, FTSE +0.45%, CAC +1.52%, MICEX +0.27%, GD.AT CLOSED% at 7:00 am CT
- Fair Value: S&P -6.86 , NASDAQ -8.28 , Dow -81.20
- Total Volume: 1.14mil ESU and 3.4k SPU traded
- Economic calendar: Jobless Claims, Philadelphia Fed Business Outlook Survey, Housing Market Index, Janet Yellen speaks, EIA Natural Gas Report, 3 and 6 and 52 Month T-bill Announcements, 10-Yr-TIPS, Treasury International Capital, Fed Balance Sheet, Money Supply. >
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