Tuesdays trade started with most Asian markets closing higher, Japan’s Nikkei hitting a fresh 26-year closing high, and North Korea and South Korea agreeing to reduce tensions. The North will send a delegation to the Winter Olympics next month, and said that both countries were committed to holding military talks.
In the U.S., the S&P 500 futures traded 140,000 ES on Globex, and had an overnight trading range of 2742.75 to another new, all-time high at 2852.75. The first print on the 8:30 CT futures open came in at 2751.50, up +4.75 handes. After the open the ES traded up to 2753.50, and then got hit by an early sell program, which took the futures down to 2748.00, as the Nasdaq 100 futures (NQH18:CME) sold off. From there, the ES then double topped at 2750.50, and then double bottomed at 2748.00. It then started going back up, as the NQ rallied, and made a new daily high at 2753.75, one tick above the earlier high, before selling off back under the vwap, and down to a ‘triple bottom’ at the 2748.00 level.
The next move was back up to a lower high at 2754.25 at 10:14 am. After a small down tick the ES shot up to 2758.50, and then had a 3.5 handle pullback down to 2755.00 before going back up to new highs at 2760.00 just after 1:00.
What Keeps Driving The Markets Higher? Growth!
There was a lot of talk yesterday about what keeps driving the markets higher. Is it Trump’s tax cuts? Trumps infrastructure plan? Bank earnings? Or, is it job growth? Personally, I think it’s all about money pouring back into stocks, and yesterday I think it had to do with the Koreas agreeing to hold talks on reducing tensions. Also, I think part of it is investors abandoning defensive positions taken to protect (hedges) against a market downturn. And lastly, President Trump calling on bipartisan lawmakers to both come up with “a bill of love” to keep thousands of young undocumented immigrants from having to leave the country, but also deliver on his campaign promise of a wall and border security, in a wide-ranging meeting that played in full view of the public. Bottom line, like him or not, the president continues to deliver on his campaign promises, and the markets have reacted in kind.
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 8 out of 11 markets closed lower: Shanghai Comp +0.24%, Hang Seng +0.20%, Nikkei -0.26%
- In Europe 9 out of 12 markets are trading lower: CAC -0.31%, DAX -0.80%, FTSE +0.10%
- Fair Value: S&P +0.08, NASDAQ +9.66, Dow -27.20
- Total Volume: 1.1mil ESH & 770 SPH traded in the pit
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