In Monday night’s Globex session the CME Group’s S&P 500 e-mini futures (ESM15:CME) traded up to 2134.00, pulled back to 2127.00 on the 8:30 CT futures open, and initially sold off down to 2121.25. It then slowly traded back up to the 2128 level where the futures chopped between 2126.00 and 2126.00 over the NY and Chicago lunch times. but started going back up after 1:00. The ESM15 made another new all time high, but ended the day down -0.1% closing at 2124.60, down 1.30 handles on the day. The Dow Jones futures (YMM15:CBT) also hit a new intraday high late in the day, but sold off slightly late, closing down -0.1%, settling at 18284, down 25 points. The Nasdaq futures (NQM15:CME) traded all the way up to 4526.50 and settled at 4501.25, down 6 points on the day. If you took the day trade as a whole it was a very quiet day in the stock market with money moving out of the energy sector and moving into the banks / financial stocks.
The other side of the coin: crude oil futures falling -3.7% for the day to $57.26. With the S&P in a slow, low-volume grind higher, many traders have moved to trading crude oil futures (CLN15: NYMX). Over the last several months CL has not only had big moves during the day sessions, but has also seen some big moves at night. Crude oil has been one of the best trades on the board and continues to be.
I had an Interesting discussion with the Pit Bull yesterday. We talked about how things that used to work don’t, and the things that do work don’t last long. Early yesterday when the ESM15 was going up, the QCHA was -40, an indication of selling going on under the surface while the Dow and the S&P were making new intraday highs.The PitBull also mentioned that while stocks moving were moving higher yesterday, they were doing so with negative breadth. He went on to say that there were “500 more stocks lower than upside stocks”. I think this all has to do with the low volumes of the stock market. The games the big institutions play are much easier to see when the volumes are this low.
Negative breadth, 500 more stocks down than up, and no selling anywhere—yet everything moves higher. After 8 straight weeks of “redemptions”, US equity funds have taken in $600 million last week, and $1.9 billion into global equity markets. The S&P is now up over 200% since making its bottom in 2009. And the party continues to roll in April with S&P 500 companies announcing a record $141 billion in authorizations for share repurchases, adding to the nearly $680 billion last year. There is no doubt that the upside party is not over. Some think the S&P could accelerate up to the 2150 level but we think the S&Ps are overdue for some type of pullback or selloff. Maybe today’s FOMC Minutes will shed some light on what the Fed has to say but we still insist there will be no rate hikes in 2015. Only time will tell…
In Asia 6 out of 11 markets quoted closed higher, and in Europe 8 out of 12 markets quoted are trading lower this morning. Today’s economic and earnings scheduled starts with Charles Evans speaking, MBA Mortgage Applications, EIA Petroleum Status Report, the FOMC Minutes at 1:00 CT, and earnings from AEO, SPLS, HRL, TGT, CRM, CTRN, LOW, LB, NTAP, WSM, SCVL, EV, EGHT, GAIN, SNPS, BRS, SFUN, ATTO, KLXI, RXN, HGR, YOKU, XNET, and EVLV.
Financials Continue to Out Perform
Our View: Too firm to sell and up too high to buy. That’s how this is working. Funny, remember the sell Bert Dohman had yesterday? He sent out an email yesterday morning saying stocks may continue higher for a few more days. I gotta ask, who in the world pays for these services anymore? Old Bob Prechter has been saying sell the S&P since the 87 Crash. How do these guys keep collecting a paycheck? That said, the ESM smoked higher yesterday and pulled back a little. Today we have some Fed speak and the FOMC Minutes so…maybe, just maybe we will see some action. I don’t know how you see it but the trade in the S&P futures has been horrible lately. The low volume and the grind higher is making it very hard for the day traders to make any money. Clearly more traders have moved to trading crude oil.
The S&P futures snapped a 3-day winning streak, while crude oil extended its move lower. Despite the stock markets’ push to record highs, investors continue to wait on the sidelines for a pull back that never seems to come. Yesterday the ESM15 got a push from the positive housing starts news, but digested it by the afternoon, and closed slightly lower. After a quiet trade overnight, we may see the S&P try to go higher, but it is in need of a few sideways to down days. We lean to selling rallies with tight stops.
“The S&P Rip, and the Crude Oil Dip”
- In Asia 6 of 11 markets closed higher : Shanghai Comp. +0.65%, Hang Seng -0.39%, Nikkei +0.85%
- In Europe 7 out of 12 markets are trading lower : DAX -0.35%, FTSE +0.14%, MICEX -1.38% , GD.AT +0.09% at 7:00 CT
- Fair Value: S&P -2.98 , Nasdaq -1.11 , DOW -29.08
- Total Volume: LOW 999k ESM and 5k SPM traded
- Economic calendar: Charles Evans speaks, MBA Mortgage Applications, EIA Petroleum Status Report and the FOMC Minutes .
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