Yesterday was more of the same. As the title says, the S&P 500 futures daily settlement has been in a tight 8 handle range over the last 11 sessions. Right now, neither bulls nor bears are winning, market timers are stuck in a rut, and swing traders are feeling the summer heat.
The only demographics that are modestly content are the day traders who are sifting through the price garbage trying to find something to eat, and option premium sellers who benefit from the tight ranges, but with the VIX so low, trading below $10.00 yesterday, there isn’t much premium to be able to sell, which ends up causing them to sell closer to the money, and then get burned.
Yesterday was like the rest of the week. After trading in just a 3.25 handle range overnight, the S&P 500 futures opened the 8:30am CT cash session at 2474.75, up 3.00 handles, and printed a high on the open of 2475.75, before selling off through the morning down to 2463.25 going into 10:00 am cst, completing a striking 12.50 handle range.
From there, the futures started to rally into the European close, made a lower high, but the exhaustion of the midday chop kept the S&P’s from breaking back above the open, limiting the afternoon’s gains to 2474.75. In the end, the ES settled the day at 2473.25, up 1.50 handles, with an MOC of $580 million to buy, on volume of a solid 1.3 million.
While You Were Sleeping
Overnight, equity markets in Asia traded lower, led by the JSX Composite, which closed down -0.75%. Meanwhile, in Europe, markets are trading mixed this morning, with a slight bias to the upside, and led by the FTSE, which is currently up +0.53%.
In the U.S., the S&P 500 futures opened last night’s globex session at 2473.25, and printed the current high of 2473.75 within the first few minutes of trade. From there, the futures drifted sideways in a 4 handle range, until just before 3:00am CT, when it briefly broke out and printed a new low at 2467.75, extending the total overnight range to 6 handles. As of 6:40am CT, the last print in the ESU is 2471.25, down -2.25 handles, with 126k contracts traded.
In Asia, 9 out of 11 markets closed lower (Shanghai -0.35%), and in Europe 7 out of 12 markets are trading higher this morning (FTSE +0.53%). Today’s economic calendar includes the Weekly Bill Settlement, Chain Store Sales, Challenger Job-Cut Report, Jobless Claims, Gallup Good Jobs Rate, Bloomberg Consumer Comfort Index, PMI Services Index, Factory Orders, ISM Non-Mfg Index, EIA Natural Gas Report, a 3-Month Bill Announcement, a 6-Month Bill Announcement, Fed Balance Sheet, and Money Supply.
Our View
Today’s calendar is busy, and tomorrow’s features the jobs number. Will any of this be enough to push the S&P to extend above 2480, or below 2460? Well, it’s possible, but I don’t think it’s likely. It feels like over the last two years, the slowest part of the summer has been in August, and if you look at last year, I’m sure that was the case.
Will the range extend? I’m sure at some point it will, but until then, we have to continue with what has been working, and that is buying these intraday dips, and maybe shorting with smaller size at the top of the range.
PitBull: CLU osc 25/15 turns up on a close above 51.79; ESU osc 0/18 turns down on a close below 2464.46; VIX osc 10/-6 turns up on a close above 10.71.
Market Vitals for Thursday 08-03-2017
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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 -0.35%, Hang Seng -0.28%, Nikkei -0.25%
- In Europe 7 out of 12 markets are trading higher: CAC +0.30%, DAX -0.33%, FTSE +0.53%
- Fair Value: S&P -2.58, NASDAQ -0.66, Dow -56.37
- Total Volume: 1.3mil ESU, and 1000 SPU traded in the pit
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