The S&P 500 futures (ESZ19:CME) closed on at 3111.50 Friday, one point below its opening print of 3110.75, after closing Thursday at 3104.00. Its trading range (3097.75 – 3114.50) remained within the boundaries of its prior day’s range. Nice to see a higher close, but with the trading range decreasing, care need be taken above these levels on the buy side.
We remain short three contracts at an average price of 3126.50, and will add more around this range. Sellers will more than likely come in at or below the highs set last week.
Whether long or short, trading these markets requires a bottle of No-Doze to stay awake. Thanksgiving week is simply not a time to do much of anything. Getting stuck in a position that goes against you is exacerbated when the size of the bids or asks remains miniscule. The potential for “spikes” on either side is obvious; we’re short for the long term and prepared to add more shorts to our position if the markets try to go higher. Numbers on the horizon are not the ones we would want to see if we were long.
The MiM
After 2:15, the ES traded up to the 3110.00, as the MiM started to show $570 million to sell. When the MiM moved up to $367 million to sell the ES traded down to 3107.25, then traded 3108.00 as the final 2:45 cash imbalance reveal showed $1.5 billion to sell.
The ES went on to traded 3107.75 on the 3:00 cash close, and settled at 3111.75 on the 3:15 futures close, up +7.75 handles, or +0.24%, on the day.
In terms of the days overall tone; the ES was firm. In terms of the days trade; volume was very low, with a total of 991k futures contracts traded, of which 217,000 came from Globex.
The Euro
We did trade the Euro. Based upon the initial reaction post Lagarde’s was in the opposite direction of our thoughts we harvested about ¾ of a point at 1.1100 and now looking for another entry point.
Again, it is Thanksgiving week, and it is highly unlikely we will do much of anything. Besides, the Euro just found another enemy in the Pound; tough for both to appreciate to any great degree when there is a battle on the continent between them.
Again, take a break; it’s good for your trading soul; we are and we hope to come back stronger after the holiday.
The Euro (6E 12-19) remains in a tight trading range just waiting for something to give it the boost it needs. That may come from Christine Lagarde, one of the best to serve in her capacity worldwide ever. She gets it; currency valuations are important during periods of trade talks.
After all, for a long period of time Europe looked to increase their share of world trade by depressing the value of the Euro. Those times have changed, and despite Europe still needing a shot in the arm, it is not going to come from lower interest rates.
Hope you took the time to listen to her last night. The Dollar is heading lower folks; it has to if Trump wants to avoid recession.
Soybeans
We have orders in below the market on Soybeans. We’ve been waiting to enter the market on the long side for weeks. Patience is a virtue. If the price collapses, as it just might do, we are going to end up with upwards of 25 to 30 long Soybean contracts. Once accumulated, we’ll be just as patient exiting the position.
We have traded Soybeans six times over the last fifteen months. Think about that; we enter the market on the long side (if there is to be a surprise it will be on the long side since the government is protecting farmer profits), but have only done so six times.
OK, I’m still lazy (actually I’m busy with another project), and I’m not doing much of anything until after Thanksgiving. By the middle of December, we’ll have it all figured out, I hope. Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight and teach. In the interim thanks, for reading what we post, and enjoy your trading.
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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.
