Welcome To The September Quad Witching

Today’s Economic Calendar:

Today’s economic calendar includes the Weekly Bill Settlement, Jobless Claims 8:30 AM ET Philadelphia Fed Business Outlook Survey 8:30 AM ET, Existing Home Sales 10:00 AM ET, Leading Indicators 10:00 AM ET, EIA Natural Gas Report 10:30 AM ET, 3-Month Bill Announcement 11:00 AM ET, 6-Month Bill Announcement 11:00 AM ET, 2-Yr FRN Note Announcement 11:00 AM ET, 2-Yr Note Announcement 11:00 AM ET, 5-Yr Note Announcement 11:00 AM ET, 7-Yr Note Announcement 11:00 AM ET, 10-Yr TIPS Auction 1:00 PM ET, Fed Balance Sheet  4:30 PM ET, and Money Supply 4:30 PM ET

S&P 500 Futures: Rotation Day

The ES sold off slightly on Globex Tuesday night and made an early Wednesday morning low at 2905.75around 7:30 am CT and traded 2911.50 on the 8:30 futures open. After the open the ES ‘shot’ up to 2917.25 in the first few minutes. The ES sold off down to the vwap at 2912.50, made a lower high at 2916.50 and then sold off down to 2910.00 as the yield on the 10 year note traded 3.07. The ES rallied back up to another lower high at 2914.75, sold back off under the vwap down to 2911.50, did a little back and fill and then shot up to a new high at 2918.75 at 10:20CT. The next move was down to 2914.00, rallied up to 2917.50 and then this headline came out: Former PBoC Gov Zhou: Chinese exporters may rapidly quit the US market over a trade war – Sees limited economic impact from tariff disputes but could be bigger in terms of confidence and then this came out just after:

Fitch analysis: US deficit widening highlights debt, policy risks – With the end of the fiscal year approaching, the US’s federal fiscal deficit is widening as the combined effect of tax cuts and persistent spending pressures outweighs the growth boost from fiscal stimulus, Fitch Ratings says. Our analysis of the US sovereign debt tolerance continues to reflect both the level and pace of debt accumulation and the nature of the authorities’ policy response. – Based on monthly Treasury data, the federal deficit for the fiscal year to end-September 2018 (FY18) will be USD849 billion, or 4.2% of GDP, slightly above the Congressional Budget Office’s (CBO) April estimate. Data for the first 11 months of FY18 show revenues rising by 1%, well below nominal GDP. – This is consistent with our view that the Tax Cuts and Jobs Act (TCJA) will lead to higher deficits and debt, despite its boosting growth. Higher expenditure underscores the fiscal impact of rising mandatory spending and the 2018 Bipartisan Budget Act, which raised spending limits for FY18 and FY19

After the headlines the sold off down to 2912.25 for what would be the low print for the remainder of the day at 11:30 and the ES chopped into the afternoon and through the closing hour as the MOC was 170 million to sell the ES pushed to the afternoon high of 2916.25 to complete a four handle trading range in the final four hours of the session. The ES printed 2914.25 on the 3:00 cash close before settling the day at 2915.00 up 3.25 handles or +0.11%.

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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.}