Macro 4

It was a long rugged day in the S&P 500 futures yesterday. While the S&P did exactly like we thought it would do, that doesn’t mean it was an easy trade. After a small winner, and getting stopped out at the low of the day, I could see that the ESU15 was churning and I re-bought the futures, and after I did I stated 5 reasons for why I thought the S&P were going to go back up.

IceChat
After another rally and pull back, the futures started moving higher, rallying nearly 20 handles up to 2089, one handle shy of my 5 reasons. Look, if you want to complicate your trading, go out and buy some fancy computers, or pay up for some high priced indicators. Work through it and hope it all ends up well. Or you can do what I do. Use the thing you think works and try and add a little street wise common sense. The way these markets are set up now is that neither the longs nor the shorts are safe right now. The ES is stuck in a narrow trading range, if you get caught selling after the S&P has already sold off, your dead, and if you bought the ES after it already went up your toast.

I am going to keep this short and sweet. Its Friday, and it’s been a very long week of ups and downs, and all the thrashing is far from over. There is a lot of risk out there, and yes, ‘eventually’ the markets will correct, but until then my message is for more of the same. Over the last several years I have tried to do my best to help provide a different way to look at the S&P, and from a lot of the emails I get, I really think the message is hitting home for some of you. That you can do it, you can make money doing this, but you have to keep your mind open and be flexible. As traders it’s all about execution and profits. Its doesnt matter how you get there, its that you make money doing it.

I am not perfect, nor do I think I ever will be, but I am going to continue to spread my message that (like the PitBull say) if you want to make the money, then you have to do the work.

In Asia, 6 out of 11 markets closed lower (Shanghai Comp. +0.27%), and in Europe 7 out of 12 markets are trading modestly lower (DAX -0.23% ). Today’s economic schedule starts with PPI-FD, Industrial Production, Consumer Sentiment, and earnings from JCP, UTSI, BLIN, ENSV, CCSC, SDPI, ACTS, EFUT, and BDMS.

Our View: I think it’s best not to have an opinion. When the bears come out of the woodwork, they tend to be more negative than the S&P actually is, and once the bulls jump back in and start taking higher prices, down goes the S&P. Again, I think I have seen every type of S&P price action dating back to 1985 and I’ll reiterate it again; I have never seen the likes of the moment we are seeing in the S&P right now. It defies reality and logic. That said it all goes back to one thing; zero borrowing cost and nowhere to go but stocks.

Our view is to buy the early weakness and sell rallies for day trading, but also to look for the PitBulls Thursday / Friday low the week before the August options expiration, and back up next week.

“S&P 500 Futures; Expect the Unexpected”

    In Asia 6 out of 11 markets closed lower : Shanghai Comp. +0.27%, Hang Seng -0.12%, Nikkei -0.37%

  • In Europe out 7 of 12 markets are trading lower : CAC -0.31%, DAX -0.16%, FTSE -0.04%, MICEX +0.80%, at 5:30 am CT
  • Fair Value: S&P -4.32 , NASDAQ -4.78 , Dow -48.90 .
  • Total Volume: .1.5mil ESU and 3.2k SPU traded
  • Economic calendar: PPI-FD, Industrial Production, Consumer Sentiment.
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