Mondays have really turned out to be the slowest trading day of the week, and not even a London terror attack could change that. The S&P 500 futures (ESM17:CME) sold off a little on Globex, traded 2435.75 on the 8:30 cst futures open, and sold off down to 2433.50 a few minutes after the open. The futures were held to just a 5.5 handle range during the day session, but were able to make a series of intraday lower highs and lower lows. At 2pm cst, the ES was trading around the VWAP when the MiM ‘flipped’ from over $160 million to buy to sell $275 million. That actual imbalance came out sell $373 million, and the futures traded down to 2434.00 on the cash close.
I said earlier in the day that after the initial move the ES would fall into a 2 to 3 handle trading range, and I was 100% correct. I also said that crude oil would be a better trade, and it was. The CLQ sold off down to 46.86 around 10:20, and then stutter stepped up to $47.52. There were a lot of dips and rips in the (CLQ17:NYMEX), and there was just a low volume grind in the ES. In fact at 2:41, there was only 703,000 ES traded, and that included 103,000 from Globex.
There is a decent economic calendar this week, but the main deal comes on Thursday when the roll over begins in the ES (September goes front month). The London election, the Apple event, and James Comey speaking to congress about Trump asking him to stop investigating the Russian connection are the other events we will be keeping an eye on. Most people are saying this could be a non-event, but with so much hype about the hearing, it’s hard to believe the ES won’t be moving. In the last few days, two traders have told me they have gone 100% into cash, so some people are concerned.
While You Were Sleeping
Overnight, equity markets in Asia were mixed with a slight bias to the down side, and were fueled by the Nikkei, which closed nearly 1% lower. The weakness in Asia followed through into the European open, where most major markets are trading lower this morning. In the U.S., the S&P 500 futures (ESZ15:CME) opened the globex session at 2434.25, and has traded lower ever since.
The high at 2435.25 was made at 6pm cst last night, before trading lower for most of the Asian session. An early low was made at 2429.50 on the Asian close, and the futures saw a brief glimmer of hope, rallying up to 2433.00 on the European open, but have since fallen out of bed again. As of 6:36 am cst, the last print in the ES is 2426.50, down 8 handles, with 125k contracts traded.
In Asia, 7 out of 11 markets closed lower (Shanghai +0.35%), and in Europe 11 out of 12 markets are trading lower this morning (FTSE -0.02%). Today’s economic calendar includes Gallup US ECI, Redbook, JOLTS, a 4-Week Bill Auction, and Treasury STRIPS.
Our View
Not much traded yesterday, and it’s my guess that today will be more of the same. As you saw on the close yesterday, there was a small amount of selling. I suspect there could be a move over the next few days as ex-FBI director Comey gets closer to testifying. I think there could be a short term set up to the downside, i.e. the PitBulls Thursday / Friday low the week before the June expiration. I do not think it will be a crushing move to the downside, but the ES may get a little weak as the week rolls on. You can take if from there…
Market Vitals for Tuesday 06-06-2017
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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 lower: Shanghai Comp +0.35%, Hang Seng +0.52%, Nikkei -0.95%
- In Europe 11 out of 12 markets are trading lower: CAC -0.49%, DAX -0.75%, FTSE -0.02%
- Fair Value: S&P -0.75, NASDAQ +0.32, Dow -6.31
- Total Volume: 890k ESM and 1k SPM traded
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