S&P Takes Out 200 Day Moving Average

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 10 out of 11 markets closed lower: Shanghai Comp -0.32%, Hang Seng -1.28%, Nikkei -0.16%
• In Europe 11 out of 13 markets are trading higher: CAC -0.06%, DAX +0.46%, FTSE +0.47%
• Fair Value: S&P -2.44, NASDAQ +1.57, Dow -58.39
• Total Volume: 2.12 mil ESM & 1.5k SPM traded in the pit

Today’s Economic Calendar:

Friday: Nonfarm payrolls, April (+185,000 expected; +103,000 previously); Unemployment rate, April (4% expected; 4.1% previously); Average hourly earnings, month-on-month, April (+0.2% expected; +0.3% previously); Average hourly earnings, year-on-year, April (+2.7% expected; 2.7% previously).

S&P 500 Futures: China Slowdown, Faster Pace Of Rate Hikes And #ES 200 Day Moving Average

The S&P 500 futures took a nosedive Thursday morning, and took out its 2611 200 day moving average in the early goings. The ES made a high at 2624.25 at 9:00 am CT, and got slammed down to 2594.00 38 minutes later. After a bump up to 2601.50, the ES sold off down to a new low at 2591.25, down -36.25 handles on the day, and then popped up to 2605.50 at 10:16. After the rally the futures then sold back off down to 2594.50 at 10:45.

I am not going to do all the little pops and drops. Over the last few weeks, I have said that there was something ‘wrong’ with the ES, and yesterday it was a story in the Wall Street Journal about an economic slowdown in China, and the Federal Reserve raising rates faster than indicated. These are the things driving the markets right now… It’s all news headlines.

As you know, the S&P made a run for new highs at the end of the day. The pattern has been predictable, but hard to trade. We’ll see what happens with the NFP number this morning… Was yesterday’s late action just a short squeeze? I don’t know, but these late day rallies are definitely burning out the Bears… Follow the money? Again, I don’t know. Closing imbalances have been negative, but I wouldn’t think there’s another puke coming before the weekend. It really feels like we’re looking at a sideways market for a little while, to me at least.

Going into the 3:15 futures close the ES traded all the way back up to 2632.75 and settled at 2631.50, up +5.75 handles, or + 0.22% on the day.

In the end, every trader says they want volatility, and that’s what everyone got yesterday. The ES was up, it was down, and it was all around, but in the end, it was all about breaking the 2611.00 200 day moving average and recovering it. In terms of the ES’s overall tone (as crazy as it sounds), it looks like prices can still go a higher. In terms of the days overall trade, it was big, 2.1 million futures contracts traded.

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