Global stock markets came to life Sunday night, and the S&P 500 futures (ESH17:CME) reacted in kind. After three weeks of sideways trade in the U.S., index markets moved higher backed by European banking stocks. Italian authorities said Sunday that they were prepared to spend $19.03 billion as part of the shutdown of two regional banks.
On the 8:30 CT futures open, the S&P 500 futures (ESU17:CME) opened at 2442.25, and then traded up to 2447.75 at 9:00am. After the high was made, the ES started to pull back a little. It was a slow start for the ES, but the NASDAQ, which made an early high at 5852.00 5 minutes after the open, tumbled all the way down to 5768.00 just after 10:00am. The midcaps got killed too, making an early high at 17559, and then selling off all the way down to 17430.
Everything was moving yesterday. At 3:00am CT, 1.8 million ounces of gold traded on the NYMEX in one minute, that’s over 18,000 contracts. Although most traders are blaming the plunge on a ‘fat finger’, or electronic error, gold prices have yet to fully recover.
CLQ made an overnight high at 43.65, and then sold off down to 42.63. After the lows were made, the NQ, ES and CL all started to bounce going into the European close. Crude oil, which has closed down five weeks in a row, traded back up to 43.50. The NQ shot up to 5806.50, and the ES bounced back to the 2441.50 level around 11:00 CT.
They say ‘money makes the world go round,’ and that surely seemed to be the case yesterday. After a series of small pullbacks, all three market moved up, but failed to make new highs. After that the ES was stuck in a 4 handle range from 2441.50-2437.25 for the next 3 hours. When the MiM came out at 2:45 showing about $300mil to sell, the ES traded down to 2435.00 going into the cash close, and finished off the day at 2435.75.
In the end the S&P 500 futures (ESU17:CME) settled at 2435.75, up handles +1.0, or +0.04%, the Dow Jones futures (YMU17:CBT) settled at 21,369, up +30 points, or +0.14%, and the Nasdaq 100 futures (NQU17:CME) settled at 5778, down points -32.25, or -0.58%. It was an unruly day filled with up and downside stops runs and lots of algorithmic and high frequency trading.
While You Were Sleeping
Overnight, equity markets in Asia traded higher, led by the NZX 50 index, which closed up +0.41%. Meanwhile, in Europe, all majors are trading lower this morning, with the exception of the FTSE, which is currently up 0.04%.
In the U.S., the S&P 500 futures opened the globex session at 2435.75 and immediately made an early low at 2434.25. From there, the ESU made a high at 2437.25, and then traded sideways in a 3 handle range for most of the Asian session. As Asian stocks were closing, the ES started to see some weakness, and at 1:45am CT, the futures broke out of the 3 handle range.
A new low was made at 2430.00, after the European open, but the ES quickly recovered, and rallied up to 2436.00 by 4:18am. Since then, the futures have once again eased off a little, and as of 6:30am CT, the last print in the ES is 2432.25, down -3.75 handles, with 125k contracts traded.
In Asia, 9 out of 11 markets closed higher (Shanghai +0.19%), and in Europe 11 out of 12 markets are trading lower this morning (FTSE +0.04%). Today’s economic calendar includes John C. Williams Speaks, Redbook, S&P Corelogic Case-Shiller HPI, Consumer Confidence, Richmond Fed Manufacturing Index, State Street Investor Confidence Index, Patrick Harker Speaks, a 4-Week Bill Auction, Janet Yellen Speaks, a 5-Yr Note Auction, and Neel Kashkari Speaks.
Our View
The algos ruled yesterday’s trade in CL, GD, ES and NQ, and there were decent volume across the board. Many traders still think there is going to be a big let down / sell off coming, and there very well could be, but we just do not see what the catalyst is going to be. The summer trade has been in full gear for several weeks, and at yesterday’s high in the ES was only 4 handles off its all time contract highs.
It seems like the index markets go from running buy stops to running sell stops, but they are not really going anywhere. A friend that only trades the DAX says he thinks the DAX is going to have a big down day today, like down over 200. Not sure why, but that’s what he said. Our view, provided nothing big happens overnight, I think we are in for more of the same; sell the early rallies and buy weakness.
Market Vitals for Tuesday 06-27-2017
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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 higher: Shanghai Comp +0.19%, Hang Seng -0.12%, Nikkei +0.36%
- In Europe 11 out of 12 markets are trading lower: CAC -0.49%, DAX -0.38%, FTSE +0.04%
- Fair Value: S&P -3.14, NASDAQ +4.14, Dow -55.96
- Total Volume: 1.2mil ESU, and 600 SPU traded
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