Yesterday, the ES was a little weak during the overnight Globex night session, and traded down to the 2428.00 level. After opening at 2433.50, the ES dropped and popped a few times, but never really gained any real downside momentum. Once I felt that I had a good look at what was going on, and knowing that the retail traders were selling 2432.50 and 2433.00’s, I put this out in the MrTopStep forum:
- IMPRO:Dboy:(10:16:28 AM): time to run some buy stops
- IMPRO:Dboy:(10:36:54 AM): My gut says that at some point the ES takes out the buy stops above 2434
- IMPRO:Dboy:(10:39:10 AM):At the end of the day the main question is.. whats changed?
- IMPRO:Dboy:(10:42:08 AM): There are always pull backs after big up days and new all time highs. Sometimes the pull backs are 20 or even 40 handle pull backs… So far the current pull back is 33 handles, and the longer the ES holds / back and fills, the more likely the ES moves back up
- IMPRO:Dboy:(10:46:45 AM):everyone trying to short , buy stops are building up
- IMPRO:Dboy:(10:16:28 AM):time to run some buy stops
- If you do a time & sales from the first post at 10:16 you will see that the ES was trading around 2430.50 – 2431 or there abouts. At 11:27 (ET) the ESU traded traded 2438.00.
I think every trader has his own unique way of reading the markets, and I tried to explain that on Twitter.
- $ES_F $CL_F Always remember, I do not pretend to be smarter than you. I do not have any special indicators. I am a futures tape reader.
Big Reversals
After the 2438.50 high, the ES pulled back down to 2435.25, and at 12:05 CT made a new high at 2439.00. From there, the futures pulled back a few handles, and then upticked again. Late in the day I said that I thought all the buying had been used up, and down the ES went. It’s was a brutally slow day, and got slower as the day wore on.
At 2:30 the MIM was showing $444 million for sale, then dropped down to $212 million for sale, and the ES traded all the way down to 2430.50 on the 3:15 futures close. The actual 2:45 imbalance showed Sell $-538 million.
In the end, it was all about running the buy stops early, and running the sell stops late. The S&P 500 futures (ESU17:CME) settled at 24347.00, down 2.25 handles, or -0.08%, the Dow Jones futures (YMU17:CBT) settled at 21350.00, down 28 points, or -0.14%, and the Nasdaq 100 futures (NQU17:CME) settled at 5784.75, down 11.25 points, or -0.19%.
While You Were Sleeping
Overnight, Equity markets in Asia closed higher, with the Shenzhen leading the way at +0.81%. Meanwhile, in Europe, most majors are trading lower this morning due to lingering oil concerns. In the U.S., the S&P 500 futures opened the globex session at 2431.25, and found an early low at 2431.00 right away. The ES slowly drifted higher throughout the Asian session, and into the European session, printing an overnight high of 2436.75 at 3:30am CT. Then, at 4:45am, a couple waves of selling came in, pulling the ES down to a new low at 2430.00, and extending the range to 6.75 handles. As of 6:30am, the last print in the ES is 2431.50, down -0.25 handles, with 82k contracts traded.
In Asia, 8 out of 11 markets closed higher (Shanghai +0.32%), and in Europe 11 out of 12 markets are trading lower this morning (FTSE -0.46%). Today’s economic calendar includes the PMI Composite Flash, New Home Sales, James Bullard Speaks, Loretta Mester Speaks, the Baker-Hughes Rig Count, Jerome Powell Speaks, and William Dudley speaks on Sunday.
Our View
The best trade of the day was buying the early dip, and the rest of the day was a total mish-mash. Late in the day, the MiM turned negative, and the ES sold off from 2438.50 down to 2431.50. It’s a tough game right now, and as June turns into July, it’s only going to get tougher. Today’s economic calendar includes some decent reports and 3 fed bank presidents speaking. Our view is for more if the same. We lean to selling the early rallies and buying weakness.
Market Vitals for Friday 06-23-2017
[gview file=”https://mrtopstep.com/wp-content/uploads/2017/06/Market-Vitals-17.06.23.pdf”]
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 8 out of 11 markets closed higher: Shanghai Comp +0.32%, Hang Seng -0.02%, Nikkei +0.11%
- In Europe 11 out of 12 markets are trading lower: CAC -0.54%, DAX -0.64%, FTSE -0.46%
- Fair Value: S&P -2.84, NASDAQ +5.26, Dow -53.83
- Total Volume: 1mil ESU, and 800 SPU traded
No responses yet