Trump and Xi Control the Markets

Charts, Commentary, News, Stocks, The Opening Print

ES Range Widens Out

The S&P 500 futures (ESZ19:CME) closed at 3075.50 Wednesday, 0.50 points above its opening print of 3075.00, after closing Tuesday at 3071.25. Its trading range (3063.00 – 3078.00) widened a little to help traders out, but still stayed in a pretty narrow range. However, it did rally later in the day to close at the upper range of its range, but there is nothing special going on here.

Going into the final hour yesterday, the ES traded up to 3074.50, sold back off to 3071.00, then rallied a few handles as the MiM showed over $200 million to buy. It went on to print 3071.25 when the 2:45 cash imbalance reveal showed $224 million to buy, then traded 3073.75 on the 3:00 cash close, and settled at 3075.75 on the 3:15 futures close, up +4.5 handles, or +0.15%, on the day

In terms of the days overall tone, there was some slight weakness, but the ES never really went down hard, and ended the day modestly higher. In terms of the days overall trade, volume was low, with 1.04 million e-mini S&P futures contracts traded.

Does This Make Sense To You?

Rather than talk about what its like, none of which anyone has any real handle on at this time, let’s pretend there is a hotline between Trump and Xi. Face it, one political party or the other is going to claim Trump orchestrated these China trade circumstances just so his friends and associates can make a few more bucks. 

Evidence has emerged that Trump and Xi are short the markets right before announcing “there are problems with the trade deal,” and long when they say, “a deal is close.” Do I think there is a possibility of this taking place; for certain. Has it happened before; yes, just ask Hillary Clinton how she made $100,000 trading live cattle on her first commodity trade. 

The Dollar

The Dollar held its 20-day moving average based primarily on the negative news surrounding, you guessed it, China. I wish there was more to say about this and the ES, and even NG, but there isn’t. China controlled the news today, as there was nothing else to even consider. We do our best to stay out of markets when there is no reason to be in them. I like to tell traders that you do not have to trade every day; listen to me, it’s an addiction.

Natural Gas Update

We sold our position in Natural Gas today. After testing interim higher prices, it failed to hold the higher levels. We seldom hold through storage numbers, which are out today at 10:00 AM EST, especially after a run one direction or another. I wish I could impart decades of trading experience in commodities of this nature to everyone. My problem is that everyone thinks they can listen to me for a day or two and have a full command of what we do. There’s a trick… it takes three days.

I need to remind myself that I’m too old to be driving from western Canada to Texas, especially last night when the fog hit the mountains just north of Albuquerque.

Thanks for the emails. Wish I was able to get started with all who “want to learn,” but it is just not possible. Hopefully by the middle of next week everything, including the Internet, will be installed. Keep emailing me at david@amstrdinggroup.com and let me know what you want to hear about.  Thanks for reading what we post. Enjoy your trading.


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Danny Riley (3244 Posts)

Danny Riley has worked in the futures and options industry for 38 years, including the CBOT’s bond room, where he worked for several of the Market Wizards. He went on to build the largest volume desk in the S&P 500 Index Futures, serving some of the largest banks and hedge funds, the UBS program trading business, and some of the world's top individual traders. As a leader and co-creator of the MrTopStep IM-Pro Trading Room, he shares trading ideas and breaking market news live from the floor with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.


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