Tariff Threats Starting To Effect A Wide Array Of Goods

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Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 9 out of 11 markets closed higher: Shanghai Comp +2.04%, Hang Seng +0.76%, Nikkei -0.29%
• In Europe 10 out of 13 markets are trading lower: CAC -0.50%, DAX -0.56%, FTSE -0.22%
• Fair Value: S&P +0.86, NASDAQ +12.75, Dow -19.42
• Total Volume: 1.08mil ESU & 450 SPU traded in the pit

Today’s Economic Calendar:

Today’s economic calendar includes James Bullard Speaks 8:20 AM ET, and the Baker-Hughes Rig Count 1:00 PM ET.

S&P 500 Futures: Slow & Steady

Thursdays trade started with most Asian and European markets trading lower, and U.S. stock futures following suit. The S&P 500 futures (ESU18:CME) overnight Globex trading range was 2806.25 to 2618.00, with 148,000 contracts traded. The first print of the day was 2808.00. After the open the ES traded up to 2812.75, and then dropped down to 2800.25 before trading back up to the vwap at 2808.00 at 9:15 am.

If you read the Opening Print and are not part of the paid subscription I would like to show you yesterdays ‘view’. While I do not claim to be right all the time I think the Opening Print gives traders a good insight into not just how I view the markets, but it also provides a feel for what i think I am seeing.

“Our View: As the bulls take over the tape and the shorts get squeezed out there seems to be a level of complacency taking place. The buyers have no fear, but one thing I keep noticing is how the VIX makes a low and then rallies even though the S&P is at or near the highs of the day. Yesterday, the VIX made a late day low at 11.44, but closed at 12.10. I am not sure it means much, but I remember in February when the S&P was making its all time high, the VIX was going up at the same time.

While I like the markets and remain bullish, the S&P has rallied 125 handles in less than 3 weeks and it ‘seems’ to be stalling. The daily gains are also getting smaller. My gut says its not impossible that the ES sees 2790 before 2840. It’s just one bad headline away.

Our view; if the ES gaps higher we lean to selling the open and buying weakness. If not we lean to buying the pullbacks with tight sell stops.”

While the view was not exact, the real part of the message was that 1) the VIX was climbing while the futures were near the highs and 2) that the bulls were getting complacent, and 2) the rally was narrowing.

After two more small selloffs and two higher lows the ES got hit by a 10:00 buy program that pushed the futures backup to 2809.50 and then up to 2811.50. After the push the ES traded back down to the 2803.50 area and then bounced up to a new high at 2813.25 at 1:15 CT. After the run up the ES sold off down to 2806.50 area as the early MiM started showing $665 million to buy. The ES then traded up to 2810.00, and sold off down to 2805.75 as the MiM dropped to buy $390 million. On the 2:54 cash imbalance reveal the ES traded 2807.00, as the final MiM showed sell $202 million, traded 2806.00 on the 3:00 cash close, and went on to settle at 2805.75, down -10.50 handles, or -0.36% on the day.

In the end it was another slow day on a list of many recently. In terms of the days overall tone, it did recover some of its earlier losses, but it was a pretty choppy trade. In terms of the days overall volume, it ended up higher then thursday, but barely broke 1 million contracts.

Stock Traders Almanac August 2018 Strategy Calendar

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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.}