Wednesdays trade started with a tech stock boost in the Asian markets, the Stoxx 600 Europe up +0.30%, and crude oil trading above $61.00. In S&P futures land, 114,000 futures traded on Globex overnight, with a trading range of 2692.25 to 2698.75. The first print off the 8:30 CT open came in at 2698.00, and a few seconds after that, the e-mini S&P 500 futures (ESH18:CME) traded up to a new milestone at 2702.00. One of the things we learned about the S&P in 2017 was that calling a top ‘did not work’. Many traders believe that 2017’s gains could mean that 2018 could be a more volatile year with some big selloffs and stock pains.
After a small down tick the ES shot up to 2706.00, up +0.43%, at 9:05. After last years 19% gain in the S&P, and 25% gain for the DOW, many well-knowns are starting to call for corrections and an uptick in volatility. Vice chairman of Blackstone Group L.P, Byron Wien, who has a widely watched prediction list, said Tuesday that he expects a 10% correction. The story is titled ‘The Market Could Get Wild in 2018, Blackstone’s Wien Predicts.’
Read the full story here: https://blogs.wsj.com/moneybeat/2018/01/02/the-market-could-get-wild-in-2018-blackstones-wien-predicts/?mod=djemMoneyBeat_us
After a two handle pullback down to the 2704.00 area, the ES continued to trounce higher up to 2708.25. There was another small selloff down to 2705.00, and then the ES rallied back up to 2707.75, and then eventually up to 2612.50, up 18 handles, or +0.68%. After the rip, the ES sold off down to 2707.50 just before the fed minutes release, which showed continued gradual rate hikes. Once the headlines were out, the ES traded back up to 2711.50, pulled back to 2709.50, and then shot back up to the high at 2712.50, as the MiM started showing over $950 million to buy.
As the futures continued to rally up to a new high at 2713.25, the VIX, which made an early low at 9.05, dropped down to a new low at 8.94, and then the ES traded up to 2714.25. The actual NYSE imbalance came out showing buy $1.65 billion, and just after it did, the ES pulled back down to 2710.75, before closing out at 2712.25 on the 3:00 cash close. As the 3:15 CT futures close rolled around, a little selling hit the ES back down to 2710.25, and that would be the last print of the day.
In the first two trading days of 2018 the Nasdaq is up over 3% and the S&P is up over 1.5%. Below is and article from the Stock Trader’s Almanac, which I am an avid follower of. While no one said the markets would go straight up in the final 5 trading day of 2017, it looks to me the trade should be to buy the close on the last trading day of the year and hold for the first 2 trading day of the new year. Had you been a believer that Santa was coming and bought the day after Christmas, most futures traders would have been knocked out of their longs on Fridays close.
In the end of Wednesday trade, the S&P 500 futures (ESH18:CME) settled at 2711.00, up +18.00 handles, or +0.66%; the Dow Jones futures (YMH18:CBT) settled at 24,878, up +110 points, or +0.44%; the Nasdaq 100 futures (NQH18:CME) settled at 6584.50, up +69.75 points, or +1.05%; and the Russell 2000 (RTYH18:CME) settled at 1555.50, up +6.70 points or +0.43% on the day.
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 9 out of 11 markets closed higher: Shanghai Comp +0.52%, Hang Seng +0.57%, Nikkei +3.26%
- In Europe 11 out of 12 markets are trading higher: CAC +1.26%, DAX +1.15%, FTSE +0.15%
- Fair Value: S&P -0.12, NASDAQ +11.97, Dow -25.38
- Total Volume: 995k ESH & 672 SPH traded in the pit
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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.
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