Yesterday, stocks fell as Republicans tried to keep their tax overhaul on track. After the United States raised interest rates by 0.25% the ECB left rates unchanged, and, in a surprise move, the People’s Bank of China raised short term funding rates by 0.05%. The message is on the wall, the world central banks are trying to push interest rates higher!
During Wednesday nights Globex session, the ESH traded down to 2666.25 and made a high at 2673.50, a total of 130,000 futures traded. On the 8:30 CT futures open the ES traded 2671.00 and printed the day session high at 2671.25 right away. That small uptick on the open was it for the early bulls, after that, the ES was slammed down to 2667.50. From there, things firmed up a little, and by 10:00 am CT had retested the high a couple times. Just after 10:00, another wave of selling came in, forcing the ES down to a new low at 2664.50. At first, It seemed like a knock down reload before the Dec expo, but the sellers weren’t done yet.
After a bounce up to 2668.50 from the 2664.50 low, things got weak again. It wasn’t a fast move down, but every attempt at an uptick was sold. This went on into the afternoon, where another new low was made at 2663.00, the exact level I called out Wednesday, and eventually down to 2661.25. There was some consolidation after that, trading between 2661.00 and 2664.00, until another leg lower started.
The day had all the markings of a typical stop run. The bulls just couldn’t get anything going, and by 1:30 pm CT, the ES had printed another new low at 2654.75. After that, the NQ started to do some back and fill, Disney went positive on the day, and the ES short covered up to 2661.75. When the MiM came out showing over $350 million for sale, stocks started heading back down, and traded another new low on the 3:00 cash close. While there were several sell programs throughout the day, it did look like some mid-month buying showed up late. On the 3:15 futures close the ES went out at 2656.25, down -12.75 handles or – 0.48% on the day.
In the end the S&P 500 futures (ESH18:CME) settled at 2656.00, down -13.00 handles, or -0.49%; the Dow Jones futures (YMH18:CBT) settled at 24,557, down -89 points, or -0.36%; the Nasdaq 100 futures (NQH18:CME) settled at 6409.00, down -8.25 points, or -0.12%; and the Russell 2000 (RTYH18:CME) settled at 1511.30, down -17.70 points or -1.17% on the day.
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 7 out of 11 markets closed lower: Shanghai Comp -0.80%, Hang Seng -1.09%, Nikkei -0.62%
- In Europe 9 out of 12 markets are trading lower: CAC -0.38%, DAX -0.16%, FTSE +0.11%
- Fair Value: S&P +3.01, NASDAQ +21.46, Dow +15.75
- Total Volume: 1.4m ESH & 3.1k 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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