The S&P futures (ESZ19:CME) closed at 3095.50 Wednesday, 14 points above its opening print of 3081.25, after closing Tuesday’s session at 3092.00. Its trading range (3075.75 – 3097.00) was about the same as the previous day, but it failed to set a new intraday high. This is a classic topping pattern; sellers are stepping in each day. Try this, when you really find it hard to make money on the upside, a top is usually near. Time will tell, but my bets are on some downside.
After the China headlines dropped late in the day, the ES fell from the highs down to the 3085 area. From there, the futures rallied all the way back up to 3095.25 as the MiM started showing Over $300 million to sell.
Big MiM Sell
Going into the close, the ES traded down to the 3091 area just after 2:30 CT, then traded back up to 3094.50 as the MiM dropped to $900 million to sell. When the 2:45 cash imbalance reveal showed $1 billion to sell MOC, the futures were trading at 3094.00. It would then go on to print 3093.00 on the 3:00 cash close, and settle the day at 3095.75 on the 3:15 futures close, up +5.25 handles, or +0.17%.
In terms of the days overall tone, the ES was firm up until the China headlines came out, it then sold off quickly and rallied right back to where it was. In terms of the days trade, volume picked up considerably after the drop and pop, with 1.21 million contracts traded, and 216,000 of that coming from Globex.
Nice move out of New Zealand last night; they held their interest rates steady at 1%. I go back far enough to know that the best Fed Chief we ever had was Paul Voelker, who had a real job to do with inflation. I remember buying 30-year treasuries below 60 as interest rates hit 15%. With that in mind, I can’t get excited about a 1% rate, but I can get excited about the move not to lower it. New Zealand got the last round of decreases started with a 0.50% drop in its last move. They are trendsetters; rates are steady worldwide now.
We got a couple GDP reports out of Europe today. It will be interesting to see how the Euro reacts. Anything north of predictions will boost the Euro. Anything south will provide a buying opportunity. The Euro is done going down and the Dollar is topping more than a point below its last interim high. We’re sitting with six long ones.
There is a world outside of the ES. Interested in learning? Send me an email at firstname.lastname@example.org and we’ll get you on board when I finally get my act together.
Did I say “widow maker” loud enough? The end of the day surge can mean only one thing; “Trading Places” is a real function in this world. Perhaps someone actually got the numbers early for today’s storage report. Could be, it has happened before.
Regardless, these instruments are best left for those with vested interests; in other words, the major producers who are more than likely taking their shorts off. It’s winter folks, surprises occur on the upside. We have no position; I’m just showing you some charts to teach you what it’s like to play on the “wild side”.
I’ve Made It Home
We hope to be live on TradeChat by November 25, so keep watching. We’ll be running “free” until I’ve figured out how to use everything correctly.
By the middle of December, we’ll have it all figured out, I hope. Keep emailing me at email@example.com and let me know what you want me to highlight and teach. In the interim, thanks for reading what we post. Enjoy your trading.
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.