History In The Making
There have been all sorts of historical records made over the last two trading days. The biggest record is that a total outsider and billionaire won his bid for the presidency of the United States. Against all odds, Donald Trump didn’t just push back from the status quo, he rewrote history. He fought the machine and won. In becoming President – elect, Trump will become the first president who has never held an elective office, or served at a high rank in the military.
Yesterday, the emini futures (ESZ16:CME) made a Globex high of 2180.50, and opened up the cash session at 2168.50. From there the ES bid higher, with strong buy programs coming in, up to 2178.50. With the large overnight volume, it’s my guess that a lot of bets had already been made. When buying dried up, the algos turned their sights to sell stops. The S&P’s sold off down to 2147.75, exactly 32.75 handles off the Globex high, and down 30.75 handles from the day session high. When the S&P’s looked weak early, they lived up to the old adage of ‘buy the dip,’ and came roaring back up to 2175.50 in the afternoon. The futures settled at 2166.75, off 13.75 handles from the high, 19 handles off the low, and up 6.75 handles on the day.
While You Were Asleep
Overnight global equity markets were mostly sideways to lower in Asia and Europe. The S&P futures dipped early in the Asian session, then rallied up to 2170.00 early after the European open, before falling back to the lows of the session. The move lower this morning took the ES down to 2151.25 before trading back up to 2159.25. The futures are currently down 8.00 handles, with 251k contracts traded at 6:18 am cst.
Today’s calendar is light, and the trade may be slower, but with such a high volume and price intense week, there could be some interesting trade left to close the week. Below 2148 the market will likely see 10-20 handles lower, while a trade above 2170 likely will see 10-20 handles higher.
In Asia, 9 out of 11 markets closed lower (Shanghai +0.78%), and in Europe 10 out of 11 markets are trading lower this morning (FTSE -1.06%). Today’s economic reports includes Banks Closed, Markets Open, Consumer Sentiment, Stanley Fischer Speaks, and the Baker-Hughes Rig Count.
Our View
Today is a bank holiday, but the markets are open. I figured the ES could not keep going up like it has been, and overnight the futures traded down to the 2151 area. Overnight the foreign markets pulled back also. As for today, we are looking for the PitBulls ‘Thursday / Friday Low’ the week before the November options expiration. Our view, despite the bounce back to the 2160 level, I still get the feeling the ES can work lower. Sell the early rallies and buy weakness, keeping in mind how weak Fridays can be. It’s been a long week of pips and rips, let’s make some money and call it a day.
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 9 out of 11 markets closed lower: Shanghai Comp +0.78%, Hang Seng -1.35%, Nikkei +0.18%
- In Europe 10 out of 11 markets are trading lower: CAC -0.60%, DAX +0.39%, FTSE -1.06% at 6:00am ET
- Fair Value: S&P -3.77, NASDAQ -4.87, Dow -55.27
- Total Volume: 3.1m ESZ and 6.7k SPZ traded
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