After trading down to 2357.50, 5 buy imbalances came popping up for a total of over 13,000 ES bought, and after that the futures rallied, but fell short of the vwap by 1 tick at 2364.00 and then slowly dropped back down to 2359.75, as the early MiM started showing over over $950 million for sale.
In the first three hours of trade there were under 500,000 ES contracts traded, with 160,000 of that volume coming for the Globex session. Volume started to pick up a bit when a sell program hit at 11:00, but it never breached 1 million contracts. One thing is clear, traders have been stepping back the last few days, it feels more like a risk off trade than risk on. The other thing that is clear is the MrTopStep 10 handle rule that has been working like a charm, 2367 down to 2357.50.
By the end of the day, the MiM that showed as much as $1.1 billion to sell saw sell orders pair back, as the official MOC came in at $150 million to sell. The S&P’s pushed down below 2360 once again into the close down to 2359.00 but then quickly rallied up to 2364.50 into the close before settling at 2362.50, down six handles on the day in what amounted to the biggest down day of the month. After the futures reopened at 3:30 cst the S&P’s pushed up to 2365.00.
Trump Delivers The Bacon
The last few days everyone seemed to be concerned that the State of the Union could spark a sell off. While it sounded good, MrTopStep began to feel that everyone was following wishful thinking, and jumping on that idea. I often say that the market will do what screws the most people, and this is currently the most hated rally ever. As DJT was speaking, it sounded like everything he campaigned on, and has mentioned since the election, were reacting with favor. There was a push up to 2372.75 and the markets don’t look poised to pullback from these levels.
As the night continued the major Asian markets closed higher, and Europe came online with all markets currently tracking strongly higher. The S&P’s traded down to 2365.75 going into the Euro open, but have since rallied firmly up to 2375.50, up 12.75 handles. As of 6:00 am cst the last print for the ESH17 is 2374.50 up 11.75 handles on volume of 217k.
Credit Suisse on the State of the Union
While You Were Sleeping
In Asia, 6 out of 10 open markets closed higher (Nikkei +1.44%), and in Europe 11 out of 11 markets are trading higher this morning (DAX +1.27%). Today’s economic calendar includes Bank Reserve Settlement, Motor Vehicle Sales, MBA Mortgage Applications, Personal Income and Outlays, Gallup U.S. Job Creation Index, PMI Manufacturing Index, ISM Mfg Index, Construction Spending, EIA Petroleum Status Report, Robert Kaplan Speaks, Beige Book, and Lael Brainard Speaks.
Barclays Calendar Preview
Even CNN Says Good Job
Our View: Wow! Even CNN said the president did a good job, and I have to agree! I also have to say things look very divided. They say politics and the markets do not mix every well, I have to disagree. I think we all know that the rally is not all because of President Trump, but clearly the markets are cheering his efforts last night.
This morning we have a deluge of economic reports to get past, and my gut says that after we do, the ES will continue higher. How high is high? I seriously do not know. 2380 is only 4 handles away, and ES 2400 is only 24 handles away. It’s unbelieveable how much, and how fast, the S&P has gone up. At its current high of 2376.00, the ESH17:CME is up 395 handles, or 20%, since the Brexit low, and it’s up 347 handle, or 17%, since the Trump election night low. Some people may not like him, but they must love what he has done for their 401k’s.
Our view remains the same. You can sell the early to midday rallies and buy weakness, or just go with the trend and buy weakness. I have to admit, the markets look great, but they are getting a frosty feeling to them. You can take it from there.
Market Vitals for Wednesday 03-01-2017
[gview file=”https://mrtopstep.com/wp-content/uploads/2017/03/Market-Vitals-17.03.01.pdf”]
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 6 out of 10 open markets closed higher: Shanghai Comp +0.16%, Hang Seng +0.15%, Nikkei +1.44%
- In Europe 11 out of 11 markets are trading higher: CAC +1.36 DAX +1.27%, FTSE +0.95% at 6:00am ET
- Fair Value: S&P -0.79, NASDAQ +1.75, Dow -11.99
- Total Volume: 1.6m ESH and 7.2k SPH traded
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