Trump And The Art Of The Deal

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 8 out of 11 markets closed higher: Shanghai Comp +2.22%, Hang Seng -0.28%, Nikkei +2.13%
• In Europe 13 out of 13 markets are trading higher: CAC +0.83%, DAX +1.22%, FTSE +1.33%
• Fair Value: S&P +3.98, NASDAQ +25.09, Dow -5.50
• Total Volume: 1.28 million ESU & 387 SPU traded in the pit

_{*As of 7:00 a.m. CST}

Today’s Economic Calendar:

Today’s economic calendar includes the PMI Manufacturing Index 9:45 AM ET, ISM Mfg Index 10:00 AM ET, and Construction Spending 10:00 AM ET.

S&P 500 Futures: Tariff Front Run

Chart courtesy of Scott Redler @RedDogT3 – $spx futures opening above 2954-2964 key area. We’ll see if it stays above it and builds. Or not! New quarterly flows can help.

After being held to just a 10 handle range during Thursday nights Globex session, the S&P 500 futures (ESU19:CME) rallied to open Friday’s regular trading hours (RTH) at 2938.50, and print a new high at 2941.00 just after the 8:30 CT bell.

It was a quiet morning, for the most part, with the ES trading down to 2932.75 after the RTH open, then drifting sideways in an 8 handle range for the next three hours. The next move next that came into play was after 11:30, when the ESU popped up to a new high at 2944.75, and the walk-away-trade started to set up.

The Walk Away Trade is a MrTopStep trading rule setup. This is an end of the quarter trade. On the last day of the quarter, the portfolio managers have a tendency to run out of money after marking up stocks earlier.

So, by 12:00-1:00ish CST, the S&P is susceptible to a decline through the afternoon. Traders look to set up a short position in the early to mid afternoon, as the professional money managers walk away, leaving the equities ready for an afternoon fade.

Download all of the MrTopStep Trading Rules here: https://mrtopstep.com/wp-content/uploads/2016/09/MrTopStep-Trading-Rules-09-28-2016.pdf

It was a textbook setup, with the ES trading 10 handles lower over the next three hours. From there, the end of the quarter rebalance took over, and the close got a little wild.

It was fairly obvious that the guys with the better seats bought on Globex, on the 8:30 CT open, and on the early and late pullbacks. People can say what they want, but we think the 20 handle rip in the last half hour of trading was a big tariff front run. 

Also, after factoring in the MiM getting as high as $4 billion to buy, it would have been hard for the ES not to close out the day on its highs. 

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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.}