Small Caps Lead The Charge

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The S&P 500 futures (ESZ19:CME) closed at 3131.50 Monday, 11 points above its opening print of 3120.00, after closing Friday at 3111.50. Its trading range (3116.50 – 3133.50) expanded with its closing at the high of the day. 

We covered our initial shorts at 3120.00. Overnight we have established another position, we stepped up the number of contracts (looking for a trade more than not) to 10, with an average entry of 3142.50; stop in at 3140 so I can get some sleep.

Goldman and others have come out suggesting the upward market trends, although somewhat abated, should continue. We are not convinced, and with a “gap” appearing, we’ll take our chances.

Look folks, if you are reading this on a regular basis, you see that we like to short tops and buy bottoms. We just don’t try to do it every day, and we realize there’s a world of commodities out there; they all have tops and bottoms.  Remember also that we trade most often with a bias; I’m a macroeconomist at heart, give me the interest rate and currency futures first then the futures that in reality trade like currencies (coffee / soybeans). There is usually no need to trade ES, but on nights like this, you have to take your shot.

New Highs On Big MiM Sell

After yesterday’s early rally, the ES had stalled out in a 3 handle range for the rest of the morning, and well into the afternoon. Going into the final hour not much had changed. Volume was low and the MiM opened showing only $5 million to buy.

Just before 2:30, the markets got a little boost from what looked like a minor short squeeze, and printed a new high at 3132.75, before retracing back to the main consolidation area of the day.

When the final MiM reveal came out at $1.3 billion to sell MOC, the ES traded back down to 3129.00, and then turned around to close the session on a strong note. The futures went on to print 3133.25 on the 3:00 cash close, and 3132.50 on the 3:15 futures close, up +21 handles on the day.

In terms of the days overall tone; the ES stayed strong all day. In terms of the days overall trade; volume was once again very low, with only 920k futures contracts traded, 148k of which came from the overnight Globex session.  

The Dollar

For the wonderful Thanksgiving break we would have shorted additional Dollar contracts, but have otherwise stayed out of the markets. We’re going to be pretty boring this week, with tomorrow being our last post.

The Euro

For the wonderful Thanksgiving break we would have shorted additional Dollar contracts, but have otherwise stayed out of the markets. We’re going to be pretty boring this week, with tomorrow being our last post.

Soybeans

We’re starting to pick up some Soybean contracts. We’re long three January beans at 895 after patiently waiting for the somewhat inflated price to drop by more than 5%. We have additional orders below the market, and will continue buying.

Natural Gas

No position yet, but getting closer. Dramatically cold weather is still expected, so sit on your hands.

OK, I’m still lazy (actually I’m busy with another project) and I’m not doing much of anything until after Thanksgiving.  By the middle of December, we’ll have it all figured out, I hope.

Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight and teach. In the interim, thanks for reading what we post, and enjoy your trading.

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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. Any decision 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.}