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S&P 500 Futures: #ES2417.75 And The Next Leg Up

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  • S&P 500 Futures: #ES2417.75 And The Next Leg Up




    You know what they say... you can't keep a good market down! Well, at least not the S&P 500 futures (ESM17:CME), Dow Jones futures (YMM17:CME) and the Nasdaq 100 futures (NQM17:CME) that is! The first time the ES passed over the big figure at 2400.00 was back on March 1st, and after the ES traded above 2400 five times. The ES was trying to overcome this level, but was unable to close above 2400, until yesterday. I have been talking about the build up of stops above 2410 for a couple weeks now, and I think yesterday’s strength was directly tied to running those stops.

    The S&P 500 futures, Dow Jones futures, and Nasdaq 100 futures have risen for six straight sessions, with the Nasdaq also notching a fresh high Thursday. The Dow industrials closed in on its record high set on March 1. After trading up to a new all time high Wednesday, the S&P 500 futures rallied overnight, opened higher on the 8:30 open, and by 10:15 CT traded all the way up to 2416.50, before pulling back to the VWAP at 2410.25. After the pull back the ES rallied back up to 2415.50, sold off down to 2412.25, and then stutter stepped back up to 2416.50. From there, the ES shot up to a new daily high of 2417.75 at 2:45 CT, and then sold back off down to 2412.75 on the 3:15 futures close.

    In terms of the day's overall trade; volume was higher, but the trade was slow. In terms of the markets overall tone; the indices acted very strong. While You Were Sleeping




    Overnight, global equity markets saw somewhat of a risk off tone as most markets in Asia were in the red, and those that were higher were barely green. Meanwhile, in Europe, all twelve markets we follow, with a single exception, are in the red this morning. In the U.S. the S&P 500 futures opened globex at 2413.00, and has seen very quiet trading. The futures pushed to a 2415.75 high early in the Euro session, and then back down to a low of 2410.00 two hours later. As of 5:28 am cst the most recent print is 2411.50, down 2.00 handles, on volume of 104k.

    In Asia, 6 out of 11 markets closed lower (Nikkei -0.64%), and in Europe 11 out of 12 markets are trading lower this morning (DAX -0.41%). Today’s economic calendar includes the 2-Yr FRN Note Settlement, Durable Goods Orders, GDP, Corporate Profits, Consumer Sentiment, the Baker-Hughes Rig Count, and John Williams speaks on Sunday.

    Our View

    The stats for the Friday before the Memorial Day holiday are slightly weak. The Dow has been down 9 of the last 16, with an average loss of -0.3%. The first trading day after the holiday, next Tuesday, has the Dow up 21 of the last 30 occasions. The week after the Memorial Day holiday has been down 12 of the last 20.

    My gut feeling is that today could see some profit taking, but that doesn't mean there won't be another push higher. Our view; buy weakness and sell rallies. Most people will probably take the day off and make the 3 day holiday into a 4 dayer. Overall, we still think up, but the ES needs to pull back a bit first.

    Market Vitals for Friday 05-26-2017

    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 +0.08%, Hang Seng +0.03%, Nikkei -0.64%
    • In Europe 11 out of 12 markets are trading lower: CAC -0.70%, DAX -0.41%, FTSE +0.12%
    • Fair Value: S&P -1.19, NASDAQ +2.60, Dow -18.78
    • Total Volume: 1.3 m ESM and 3.8 k SPM traded

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