Things were going pretty well before last week. Fridays tech stock blow out really set the record straight, the bulls are not to be messed with. While some investors have been nervous about how much the markets are up, the Dow Jones set its 54th new record high, and had its best month since 2008. This was all caused by a pickup in economic growth around the world, boosted by shares of blue chip firms. Everyone always talks about the S&P, but it’s the Dow that has really outperformed the rest of the pack.
S&P Notches Largest Monthly Gain Since February
Tuesday started with 90,000 ES contracts traded on globex with an overnight range of 2573.75 to 2566.75. The first print on the 8:30 CT futures open was 2572.75. From there, the ES traded down to 2569.00 at 9:15, and then rallied above the vwap to 2574.25, pulled back a few ticks above the vwap, and then back and filled for a few hours until it ‘double topped’ at 2575.50 at 2:15. Just as it did, the MiM started to show over $400 million for sale, then it dropped to over $800 million for sale, and the ES broke down to 2571.00 just before the 3:00 cash close. The actual NYSE imbalance showed MOC sell $2.2 billion. In a nutshell, there was a big sell imbalance, and a small walk away for the futures.
In the end S&P 500 futures (ESZ17:CME) settled at 2572.75, up +4.50 handles, or +0.17%; the Dow Jones futures (YMZ17:CBT) settled at 23325, up +34 points, or +0.14%; the Nasdaq 100 futures (NQZ17:CME) settled at 6249.75, up +25.50 points, or +0.40%; and the Russell 2000 (RTYZ17:CME) settled at 1502.70, up +9.60 points or +0.63% on the day.
Surprise,Surprise, CME Group Jumps On The Bitcoin Digital Bandwagon
While several big countries like China and South Korea have shunned Bitcoin, the world’s largest futures exchange, the CME Group, is embracing the digital currency. In a surprise announcement the exchange announced it would list the bitcoin currency as one of its latest contracts. According to Coinmarketcap.com the total value of all bitcoins in existence recently surpassed $100 billion, and now stands at $106.9 billion, higher than the value of the market capitalization of Goldman Sachs, which stands at $93.8 billion. Goldman has said it was considering a trading operation for bitcoin and other crypto currencies.
Listing bitcoin futures on CME or another U.S. exchange would make it easier to trade the digital currency by allowing market participants able to sell short if investors thought the price was going to fall. In September Jamie Dimon from JP Morgan said he viewed bitcoin as a ‘fraud’ that will eventually blow up. Over the last several years, there have been some big cases where ‘bitcoin exchanges’ had disappeared overnight, and millions of investors money stolen. Several governments, including the U.S, say bitcoin can be used by drug cartels, but somehow the CME has given the go ahead to list the contract.
While You Were Sleeping
Overnight, equity markets in Asia traded mostly higher, led by the NIKKEI, which closed up a whopping +1.86%. In Europe, stocks are also booming this morning, with the DAX leading the way at +1.67%.
In the U.S., the S&P 500 futures opened last night’s globex session at 2573.75, and printed the low at 2571.00 in the first few minutes of trading. The ES never looked back from there, and rallied all the way up to 2584.00, opening November with a 13 handle overnight range. As of 7:10am CT, the last print in the ES is 2582.50, up +9.75 handles, with 160k contracts traded.
In Asia, 7 out of 11 markets closed higher (Shanghai +0.08%), and in Europe 11 out of 12 markets are trading higher this morning (FTSE +0.23%).
Today’s economic and earnings calendar includes PMI Manufacturing Index (9:45 a.m, ET), ISM Manufacturing Index (10:00 a.m. ET), Construction Spending (10:00 a.m. ET), EIA Petroleum Status Report (10:30 a.m. ET), FOMC Meeting Announcement (2:00 p.m. ET) Earnings: Estee Lauder (6:45 a.m. ET), Southern Co. (7:00 a.m. ET), Apollo Global Management (6:35-7:00 a.m. ET), Allergan (7:00 a.m. ET), Sinclair Broadcast (7:30 a.m. ET), Molson Coors Brewing (7:45 a.m. ET), New York Times Co. (8:30-9:05 a.m. ET), Facebook (4:00-4:05 p.m. ET), Kraft Heinz (4:00 p.m. ET), QUALCOMM (4:01 p.m. ET) Tesla (4:05-4:10 p.m. ET), Prudential Financial 4:10-4:20 p.m. ET), Metlife (4:15 p.m. ET), Allstate (4:15 p.m. ET).
Our View
Another big day of economic reports and earnings. According to the Stock Trader’s Almanac, the first trading day of November has the Dow up on 5 of the last 7 occasions. I do not think there is much that has not been said, the ES is on its way to 2600.00. Our view is unchanged; you can sell the gap higher open or the first small rally above the gap, or you can buy weakness when the ES pulls back. If the markets are firm, I think there is a good chance the ES trades up to 2586-2588.
PitBull: CLZ osc 35/12 turns down on a close below 54.43; ESZ osc 13/18 turns down on a close below 2583.98; VIX osc -8/8 turns up on a close above 9.87.
Market Vitals for Wednesday 11-01-2017
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As always, please use protective buy and sell stops when trading futures and options.
- In Asia 7 out of 11 markets closed higher: Shanghai Comp +0.08%, Hang Seng +1.23%, Nikkei +1.86%
- In Europe 11 out of 12 markets are trading higher: CAC +0.43%, DAX +1.67%, FTSE +0.23%
- Fair Value: S&P -3.02, NASDAQ -1.10, Dow -61.16
- Total Volume: 1.03mil ESZ & 757 SPZ traded in the pit
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