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Some days the ES has firing power, and some days it doesn't. After Tuesday's low volume grind and narrow trading range, the sellers showed up in force early yesterday morning.
The ESM17:CME traded up to 2416.75 on Globex, opened at 2414.50 on the 8:30 CT open, and by 10:02 was trading all the way back down at 2402.75. The futures ‘triple bottomed’ on that low and then ran up to 2406.50, pulled back a little, then shot back up above the vwap at 2410.25. After the ‘pop’ the ES sold off down to 2405.75, rallied back above the vwap to 2409.75 (lower high), sold back off down 2404.25, rallied back up to 2409.00 (another lower high), pulled back down 2405.75 (higher low), and then pushed back up 2409.50 (lower high), before selling back off down to 2406.00.
Total volume was much higher; at 12:40pm 1.1 million ES had traded. After a little pop back up, the ES traded down to 2403.75 at 1:15. After that the MiM took over. Just before 2:00pm CT the cash imbalance was showing over $1 billion to buy, with GS making up about $300 mil of that, and by 2:40 the ES was trading at the 2410 area. When you look at the chart from 9:40 to just after 2:00, the total range was just 5.5 handles. MiM Smoke Job - NET Buy $1.467 Bil
In the end, it was a big end of the month set up. If you were watching, you saw a big sell program come in early in the day session. Combine that with the weak bank stocks, holding the ES below the vwap for most of the day, and then the guys with the better seats show up at the table with wads of cash to buy.
Here’s how the actuals came out; NYSE Closing Imbal: NET Buy $1.467 billion. The ES traded up to 2411.50 going into the 3:00 cash close, and settled where it opened at 2414.50 on the 3:15 futures close. In terms of the overall tone, things didn't act all that well, but the close was a whole different story. While You Were Sleeping
Overnight, Asian markets traded mostly higher in another quiet session. Meanwhile, in Europe, all major markets are trading higher this morning. In the U.S. the S&P 500 futures (ESZ15:CME) were held to just a 4 handle range. The Globex high at 2414.50 was made at 8:20pm cst last night, and the low at 2410.50 was made just an hour later. Since then, the futures have been in a low volume sideways grind. As of 6:40am cst, the last print in the ES is 2412.50, up 1.50 handles, with 100k contracts traded.
In Asia, 7 out of 11 markets closed higher (Shanghai -0.50%), and in Europe 12 out of 12 markets are trading higher this morning (FTSE +0.35%). Today’s economic calendar includes Motor Vehicle Sales, the Weekly Bill Settlement, Chain Store Sales, Challenger Job-Cut Report, Jerome Powell Speaks, the ADP Employment Report, Jobless Claims, Gallup Good Jobs Rate, PMI Manufacturing Index, Bloomberg Consumer Comfort Index, ISM Mfg Index, Construction Spending, EIA Natural Gas Report, EIA Petroleum Status Report, a 3-Month Bill Announcement, a 6-Month Bill Announcement, Fed Balance Sheet, and Money Supply. First Trading Day Of June ( 6 Months In )
Our View: The S&P acted top heavy, but the month end buyers showed up in force. There are two sides to the trading card; they showed you the red side for most of the day, and the blue side late in the day. The sellers got screwed again. Today has 7 separate economic reports. Our view; who the hell knows. The patterns remain the same; sell off and then bounce. We lean to selling the early rallies and buying weakness. The mutual funds probably have cash to buy in the first 2-3 days of the new month.
Market Vitals for Thursday 06-01-2017
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 7 out of 11 markets closed higher: Shanghai Comp -0.50%, Hang Seng +0.58%, Nikkei +1.07%
- In Europe 12 out of 12 markets are trading higher: CAC +0.59%, DAX +0.21%, FTSE +0.35%
- Fair Value: -0.62 S&P , +1.32 NASDAQ , -3.88 Dow
- Total Volume: 1.7mil ESM and 2.6k SPM traded