Triple Upside
The S&P 500 futures (ESZ19:CME) closed at 3090.50 Friday, 8.75 points above its opening print of 3081.25, after closing Thursday at 3085.75. Its trading range (3072.50 – 3097.00) widened a little to help traders out, and closed at the highest point of its range.
Just before 2:30 CT, the ES rallied from 3084.00 up to the 3089 level, as the MiM went from over $350 million to sell to nearly $600 million to sell. On the 2:45 cash imbalance reveal, the futures traded 3088.25 when the final MiM flipped to $1.5 billion to buy. It then went on to print 3091.50 on the 3:00 cash close, and settled at 3090.50 on the 3;15 futures close, up +4.50 handles on the day.
In terms of the days overall tone, the markets were fairly strong, closing near the highs. In terms of the days overall trade, volume was on the low side, with just over 1 million e-mini S&P futures contracts traded.
There is some semblance of a “common sense” reaction to economic reality coming back into focus. That is a good thing and will be the subject of much of today’s Opening Print.
Interest Rates Tell A New Tale
For some reason, “normal” reactions to macroeconomic undercurrents returned to the forefront. No longer are traders simply looking for lower interest rates. I remember a time when lower interest rates signaled recession.
Sure, in periods where higher interest rates were designed to snuff out inflation, the reaction was positive when rates initially declined, but inflation is not an issue. Higher interest rates mean the economy is growing at a manageable pace. That is why when the rates for the 10-year increased, traders finally realized that was a good thing. Now about the Dollar.
The Dollar
The Dollar continues to drift higher, with stronger volume coming in above its 20-day moving average, based primarily on the above where higher interest rates attract investment. Our average price on the short Dollar trade remains positive, but further increases will be met with liquidation to preserve the profits. Taking the emotion out of this trade is important.
We’ve shorted the Dollar twelve times since 2015, and will continue to do so, as macroeconomically speaking, a strong Dollar is the last thing a manufacturing country wants to see. Keep an eye on the Euro, as that is where indications of Dollar weakness will begin.
Made it to Texas in one piece. I will be set up before the end of the week. We hope to be live on TradeChat by November 18, so keep watching. We’ll be running “free” until I’ve figured out how to use everything correctly. By the end of November, we’ll have it all figured out, I hope.
Keep emailing me at david@amstrdinggroup.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.
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.
No responses yet