After a lot of ups and downs last week the emini S&P 500 futures (ESZ16:CME) basically closed little changed on the week. On Friday September 9th, the ESZ settled at 2114.50, and last Friday, after a big week of thrashing, the futures settled at 2132.50. Despite all the negatives, the S&P followed one of MrTopStep’s trading rules; the futures tend to close up a day, down a day during the expiration week.
For the week the Dow Jones futures (YMZ16:CME) closed down -0.20%, the S&P 500 futures (ESZ16:CME) closed up +0.50%, and the Nasdaq 100 futures (NQZ16:CME) closed up over 2%. Crude oil continued its decline falling over 2%. There seems to be no shortage of bad news out there, and the U.S. Justice Department is pushing to make Deutsche Bank pay back $14 billion to settle the mortgage securities probs from the 2007 credit crisis. When you add it all up, the S&P held together pretty well, all things considered.
So how bad was it? The initial sell off and overall negative tone seemed to let up during Thursday’s rally and into Friday’s September options expiration. With mutable terror attacks, and the week after the expiration being historically weak, we are not 100% sure the decline is over.
This week there is a low level of economic reports, but the center of attention will be Wednesday afternoon when the fed announces its rate hike decision. The other main attraction will be this morning when the S&P Dow Jones indices ‘split’ off real estate companies from the financial sector to create an 11th stock grouping. According to S&P Dow Jones Indices, new groupings have only been introduced on three previous occasions since 1957, when the S&P 500 index was introduced, and the last one was in the DotCom era..
Lets face it traders, volatility is up, and it’s probably going to stay that way right into the end of October. Can the bull push the futures higher this week when the fed doesn’t raise interest rates? It’s highly possible, but I am not sure the ES won’t take out its most recent low this week either. It should slow in front of the fed decision at 1:00 ET, but that doesn’t mean there won’t be some big swings. Buckle up, it could get rough!
With the Nikkei in Japan closed, overnight equity markets worldwide were lifted higher. At 6:30 pm cst last night, the ESZ16 spiked up to 2141, and kept a bid during the Asian and European sessions. An overnight high was made at 2144.25 at 4:15 am cst and then a low was made for the European session at 2140. Currently the ES is trading at 2141.75, up 9.25 handles, or .43% on the session with volume at 115K at 6:30 am cst.
Heading into today’s session it appears that the S&P may be starting to break out of last weeks back and fill range. It seems possible to make a push up to 2160 this week, where the index may see some resistance on the weekly time frame. Bulls need another “mutual fund Monday” like last weeks. Early buy programs need to push the index above 2150, and at least close above that mark, which exceeds the high of the day for everyday after last Monday. Bears need to reject this globex rally and push for a close somewhere around last night’s 2132 open.
In Asia, 8 out of 10 open markets closed higher (Shanghai +0.77%), and in Europe 11 out of 11 markets are trading higher this morning (FTSE +1.38%). This week’s economic calendar features the 2 Day FOMC Meeting and includes 18 other reports and 12 U.S. Treasury bill or note events. Today’s economic calendar includes Housing Market Index, a 4-Week Bill Announcement, a 3-Month Bill Auction, and a 6-Month Bill Auction.
Pre-Fed Squeeze Job
Our View: Terror attacks, a two day fed meeting, and the S&P regrouping could make for some decent trade this morning. I am writing this Sunday afternoon and I want to see how the futures act on globex. If the ES holds up over night I think we could see higher prices, short squeeze, into the fed meeting. Our view is to sell the early rallies and buy weakness.
‘MrTopStep BootCamp’
MrTopStep BootCamp starts today! That said, this bootcamp is going to offer new talent on the trading and technology side. Dave Wienke from POINT.786 is on the schedule a few times to go over his technical service and how it can help your trading. Also, Anthony Stavros from CQG will be demonstrating the platform and going over the newest product releases. It’s an exciting time at MrTopStep, and with volatility picking up, the September quad witch, and the end of the 3rd quarter just around the corner, there could be no better time to sign up. Below is the full week schedule of the boot camp. I hope to see you in there!
View the course description and sign up for MrTopStep BootCamp here.
Thanks,
Danny ‘DBOY’ Riley
MrTopStep BootCamp Starts Today! Sign up here to get a spot before registration closes.
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 8 out of 10 markets closed higher: Shanghai Comp +0.77, Hang Seng +0.92, Nikkei closed
- In Europe 11 out of 11 markets are trading higher: CAC +1.36%, DAX +0.66%, FTSE +1.38% at 6:00am ET
- Fair Value: S&P -7.23, NASDAQ 6.02, Dow -87.46
- Total Volume: 2.0mil ESZ and 11.4k SPZ traded
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