There is one question no one can answer right now, and it’s been going around for a while. When is the VIX going to start going up? It started going up yesterday while the ES was up over 17 handles. Most market participants know that when the VIX gets under 10 risks goes up, and when it gets under 9 it really goes up, but you know what? No one seems to care.
On Monday night, the S&P 500 futures (ESZ17:CME) sold off down 2597.50, and then rallied up to 2606.75 before Tuesday’s 8:30 CT futures open. Total Globex volume was 196,000 contracts traded. When the bell rang, the first print on the open was 2605.75, up +4.00 handles.
The initial move after the open was a quick dip down to 2604.25, but the weakness was short lived, and the bulls came piling back in. By 10:00am CT, the ES had printed another new all time high at 2609.75, and completed a MrTopStep 10 handle rule off of the Globex lows, that was not the end of the rally though.
After a small pullback to 2608.25 the ES strapped on the boosters once again and headed for new highs. At 11:30 the ES had topped out at 2617.50, up +15.75 handles, with only 672k total contracts traded, including Globex. It looked to be that cyber sales were really cranking up the markets. The next move was up to another new high at 2620.50, and not long after, this headline came out:
SEOUL, Nov. 29 (Yonhap) — North Korea fired an unidentified ballistic missile from South Pyongan Province early Wednesday, South Korea’s Joint Chiefs of Staff said. The missile flew eastward and the South Korean military is analyzing details with the U.S.
The ES immediately sold off 10 handles down to the 2609.75, and then shot right back up to the 2620. It seems like no news is bad news for the S&P. It took 55 minutes to drop down to 2609.75 from the 2620.75 high, and it took 43 minutes to trade back up to 2621.00. The move didn’t stop at 2621.00, and just before 2:30pm CT, another new high was made at 2627.00, up 24.5 handles, or +0.92%.
The ES then sold off down to 2623.00 as the MiM started to show $300 million to sell. The MiM started to flip, and as it did the ES traded back up to 2626.50. The actual 2:45 cash imbalance showed NYSE Closing Imbal: NET Buy $242 M – 11/28/2017-14:45 CT. On the 3:00 cash close the ES traded 2625.50, and then went on to trade 2625.75, up 23.25 on the 3:15 futures close.
What can I say? What can anyone say? The ES went ballistic on the upside despite the North Korean missile launch. As I have always said, the ES makes good of bad news. It was an amazing day that saw a big early up, a big drop, and an even bigger rally. In the end the S&P 500 futures (ESZ17:CME) settled at 2626.00, up +24.25 handles, or +0.92%; the Dow Jones futures (YMZ17:CBT) settled at 23,811, up +249 points, or +1.04%; the Nasdaq 100 futures (NQZ17:CME) settled at 6420.25, up +7.00 points, or +0.11%; and the Russell 2000 (RTYZ17:CME) settled at 1536.30, up +23.00 points, or +1.49% on the day.
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 6 out of 11 markets closed higher: Shanghai Comp +0.13%, Hang Seng -0.19%, Nikkei +0.49%
- In Europe 10 out of 12 markets are trading higher: CAC +0.64%, DAX +0.88%, FTSE -0.52%
- Fair Value: S&P -0.79, NASDAQ +2.67, Dow -14.83
- Total Volume: 1.55m ESZ & 2.3k SPZ traded in the pit
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