Still Have Gaps to Fill

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 9 out of 11 markets closed lower: Shanghai Comp -1.40%, Hang Seng -1.82%, Nikkei -1.18%
• In Europe 13 out of 13 markets are trading lower: CAC -1.32%, DAX -1.58%, FTSE -0.67%
• Fair Value: S&P -0.41, NASDAQ +4.62, Dow -12.49
• Total Volume: 881k ESM & 1,008 SPM traded in the pit

Today’s Economic Calendar:

Today’s economic calendar includes MBA Mortgage Applications 7:00 AM ET, PMI Composite Flash 9:45 AM ET, New Home Sales 10:00 AM ET, EIA Petroleum Status Report 10:30 AM ET, FOMC Minutes 2:00 PM ET, and Neel Kashkari Speaks 2:15 PM ET.

S&P 500 Futures: #ES Low Volume And Gaps To Fill

Burt Doman always says that low volume rallies are not a positive, and over the last few days as the VIX has dropped so has the stock markets volume. After Sunday nights China news, total Globex volume in the S&P 500 futures was only 105,000, and Monday night to Tuesday mornings Globex volume was only 89.000. The only time that I have seen 89,000 ES trade on Globex is over Christmas, and even then I think it was higher.

Yesterday’s trade started with Global stocks extending their gains as worries about trade tensions continued to ease. The overnight trading range was 2730.50 to 2739.00, with only 89,000’ contracts traded. On the 8:30 bell, the S&P 500 futures pointed to a 0.2% rise, and traded 2738.50 on the open. The first move was a pop up to 2741.75, followed by a quick drop down to 2736.75. From there, the ES rallied and made a lower high 2741.00, and then made three lower lows at 2733.25, 2733.00 and 2732.50. The ES then rallied up to two lower higher 2739.00 and 2738.25 and then sold off down to 2733.25 at 11:40 am.

Basically from 9:15 to 2:00 the ES was stuck in a 6 1/2 handle range. At 2:15 the futures sold off to a new daily low 2728.50, breaking out of the range as the early MiM went from $143 million to buy to $271 million to sell. The ES then traded up to the 2731.00 level and made a new low at 2724.75 when the MiM went to $320 million to sell. On the 2:45 cash imbalance reveal, the futures traded 2525.50 as the MiM came out sell $1.3 billion. The ES made a low at 2571.50, traded 2724.50 on the 3:00 cash close, and went on to settle at 2725.00 on the 3:15 futures close, down -8.25 handles, or -0.23% on the day.

The Guy’s With The Better Seats, Goldman’s Trading Desk

Yesterday’s trade was about three things. The first was the total lack of volume. At the end of day only 846,000 ES futures traded, minus 89,000 from Globex, which means only 757,000 futures traded on the day. When you take out 70% (being nice) for the algos / HFT that means only 227,100 traded on the day session. That has to be record low volume. The other part was the big rotation; sell Russell 2000 / buy Nasdaq.

All day long the ES traded in a six handle range until late in the day when the NQ traded above the vwap up to 6931.50, and then flunked right after it made a late day high. And, last but not least, President Trump saying his June summit with North Korean leader Kim Jong Un “may not work out.” In the end it’s hard to believe the guys with the better seats didn’t know the MOC was going to be big for sale.

U.S. stock buybacks in earnings season top $183 billion: TrimTabs

NEW YORK (Reuters) – U.S. companies announced $183.4 billion in share buybacks during the most recent earnings season, according to TrimTabs Investment Research.

The total buyback figure is the second-largest on record, TrimTabs said. The previous earnings season, in January and February, saw U.S. companies announce $191.4 billion in share repurchases.

The swelling figures for buybacks have been driven by the December U.S. tax overhaul, which lowered the corporate tax rate. Several companies have since directed their tax savings to share repurchases.

“The buyback boom early this year confirms our view that the main use of corporate America’s tax savings will be takeovers and stock buybacks rather than capital investment or hiring,” TrimTabs said in its report.

_{AAPL 3-Month Chart}

Though the total volume of buybacks is higher than usual, the number of buyback announcements was in line with the average for the previous eight earnings seasons, according to TrimTabs.

Five companies accounted for 75 percent of the most recent season’s buyback announcements. More than half of the total was contributed by Apple Inc (AAPL.O), which on May 1 said it had committed to an additional $100 billion for its stock repurchase program.

Broadcom Inc (AVGO.O), Facebook Inc (FB.O), Qualcomm Inc (QCOM.O) and T-Mobile US Inc (TMUS.O) made the next four largest buyback commitments. Their combined announcements totaled $37.3 billion.

Reporting by April Joyner; Editing by Alden Bentley and Nick Zieminski

SIGN UP HERE TO GET THE FULL MRTOPSTEP OPENING PRINT!

As always, please use protective buy and sell stops when trading futures and options.

_{Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.}