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S&P 500 Futures: May Options Expiration Week #ES Stop Run

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  • S&P 500 Futures: May Options Expiration Week #ES Stop Run




    Everyone is entitled to their own opinion. CNBC and FOX have theirs, and I have mine. What you will be reading are excerpts of yesterdays messages I sent out in the MrTopStep forum, ICE chat and Twitter. If you have time and sales on your charts, I only ask that you go back to the exact times the IM’s were sent out and check where the ES was trading. Like I have said many times, you won't get this on CNBC, Bloomberg or FOX.

    Yesterday was what i call a perfect storm. The S&P 500 futures made a low last Thursday fulfilling the PitBull’s rule about looking for a low on the Thursday or Friday the week before the option's expiration. On Friday the ES never took out Thursday's low and traded sideways to higher. Sunday night the ES started to uptick, and then rallied right off the 8:30 CT futures open.

    Below are the messages, and times, that I sent out yesterday. They lay out why the S&P futures (ESM17:CME) would do an upside stop run.
    09:23:03 TRADINGDATA2: (driley) the ES is doing a big back and fill at the 2380 level and traded up to 2394.50 on globex

    09:23:35 TRADINGDATA2: (driley) On Friday only 1 mil es traded and the included 155k from globex

    09:24:57 TRADINGDATA2: (driley) the credit crisis, zero borrowing cost, the Flash crash, MF Global, PFG, and the algos have run most traders out of the biz

    09:25:42 TRADINGDATA2: (driley) at 1 million contracts that 5.69 mil lower than the all time record high

    09:26:50 TRADINGDATA2: (driley) That all said I think after a small pull back this morning the es is going to move up to or above 2400

    09:27:32 TRADINGDATA2: (driley) And at some point this week will see 2412 to and maybe, could be a long shot 2420
    Here’s the other part you won't hear on CNBC...
    09:28:36 TRADINGDATA2: (driley) all this sideways price action does is add buy stops above the market and after several day of it there is usually a pop and the May expo may help provide that

    09:29:07 TRADINGDATA2: (driley) Fridays May expo stats are weak

    09:29:31 TRADINGDATA2: (driley) and as the PitBull says.. 09:28:58 PITBULL: mid month today!!!!!!!!!!!!

    09:35:58 TRADINGDATA2: (driley) the volume is so low that when you get these little drops and pops it just ads more buy stops

    09:50:04 TRADINGDATA2: (driley) : all buy stops

    09:50:12 TRADINGDATA2: (driley) : looking at a trend day up

    09:57:05 TRADINGDATA2: (driley) MrTopStep-Stop-O-Meter is showing a 'SIZE STOP RUN" taking place

    10:02:21 TRADINGDATA2: (driley) stops / buy programs / thin to win

    10:08:24 TRADINGDATA2: (driley) I think we still go up but the first time up to 2400 could see some selling
    The (ESM17:CME) reacted in kind and rallied all the way up to 2402.25 before stutter stepping down to the VWAP at 2397.25. After that, the futures rallied back up to 2401 as the MiM went from $250 million to buy to MOC buy of $1.4 billion. The ES down ticked going into the close and settled at 2398.25. While You Were Sleeping




    Overnight Asian markets leaned lower, with the exception of the Shanghai and Nikkei, and in Europe most markets are trading lower, with the exception of the FTSE. In the U.S. the S&P 500 futures opened globex at 2399.75 and traveled to the overnight low at 2396.25 early in the Asian session. Since then the futures have pushed back up to a new session high at 2402.00, and as of 7:15 am cst, the most recent print is 2400.00, up 1.50 handles, with 110k contracts traded.

    In Asia, 6 out of 11 markets closed lower (Shanghai +0.75%), and in Europe 9 out of 12 markets are trading lower this morning (FTSE +0.57%). Today’s economic calendar includes Housing Starts, Redbook, Industrial Production, E-Commerce Retail Sales, and a 4-Week Bill Auction.

    Turnaround Tuesday Meets Thin To Win

    Our View: It doesn't feel like this pop is over. Today, ‘Thin to Win’ meets ‘Turnaround Tuesday’. My feeling is that we see a move higher for at least the first half of the day. Let’s face it, the S&P is up too high to buy, and too firm to sell. Our view is that it is possible we see another upside stop run, but we also can’t rule out some type of pull back. 24106-2408, 2412, 2420 ON TAP!!!

    PitBull: CLM osc 18/-20 turns down on a close below 47.66, ESM osc 2/16 turns up on a close above 2396.38, VIX osc 2/-15 turns down on a close below 1033.

    Market Vitals for Tuesday 05-16-2017




    As always, please use protective buy and sell stops when trading futures and options.
    • In Asia 6 out of 11 markets closed lower: Shanghai Comp +0.75%, Hang Seng -0.14%, Nikkei +0.25%
    • In Europe 9 out of 12 markets are trading lower: CAC -0.34%, DAX -0.10%, FTSE +0.57%
    • Fair Value: S&P -1.86, NASDAQ +1.78, Dow -37.22
    • Total Volume: 1.0 m ESM and 3.5 k SPM traded

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