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S&P 500 Futures: Weak Jobs Number Pushes ES To All-Time New Contract Highs

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  • S&P 500 Futures: Weak Jobs Number Pushes ES To All-Time New Contract Highs




    After a weaker than expected jobs number, the S&P 500 futures (ESM17:CME) sold off down to 2428.50, and then short covered before the 8:30 CT open. After the open, the ES rallied up to the 2433.25 level, and then sold off down to the 2428.00 level. A new low was made by 2 ticks, then the futures rallied up to 2430.75, sold off back to a new daily low at 2427.00 at 10:00, and then reversed higher. At 10:09 the ES traded up to a new daily high at 2434.00, 2.25 handles above the vwap, pulled back 2 handles down to 2432.00, and continued moving higher all the way up to a new all-time contract high at 2439.75 on the 2:45 cash close. The NYSE Closing Imbalance showed a NET Buy of $816 Million.

    While the unemployment rate fall to a 16-year low, and hiring has slowed, it has not stopped the U.S. major indexes from moving to new all time highs. It has been an unbelievable move up over the last few weeks, and there doesn't seem much in the way of it continuing. One thing that should be a major concern is the CBOE VIX. As the S&P 500 futures rallied, the VIX fell to 9.75.

    On Friday, The Dow Jones futures (YMM17:CBT) advanced 71 points, or +0.33%, to 20213.00. The S&P 500 futures (ESM17:CME) added 8.10 handles, or 0.32%, to 2437.70, and the Nasdaq 100 futures (NQM17:CBT) climbed 64 points, or 0.9%, to 5886.00. All three indexes posted a second consecutive week of gains, with the Dow up 0.7% in the latest week, the S&P 500 up over 1%, and the Nasdaq up 2%. The funny thing about Friday’s rally was that financial shares were among the biggest decliners in the S&P 500, slipping 0.4%, and posting a weekly fall of 0.8%. What This Never Before VIX Signal Means For Stocks




    The CBOE Volatility Index (VIX) hit 16.30 on May 18 - its highest intraday mark since Nov. 10, just after the U.S. presidential election. Last month's volatility spike was likely due to the combination of growing concerns over the Trump administration's ability to pass its legislative agenda, as well as the previous day's expiration of May VIX options. Despite this blip, though, it was the lowest average May VIX on record -- a signal that could bode well for stocks.

    For the most part, VIX spent May south of the 11.25-11.50 region, which is half its pre-election high, and hit a 10-year intraday low of 9.56 on May 9. Underlining this period of low volatility is data from Schaeffer's Senior Quantitative Analyst Rocky White, which showed the VIX traded at 10.86, on average, last month -- the lowest average May VIX ever, taking out 1995's previous low-water mark of 12.27.

    Read the full article from Schaeffer’s Investment Research here.

    While You Were Sleeping

    Overnight, equity index markets in Asia and Europe traded mixed, with a slight bias to the down side. Meanwhile in the U.S., the S&P 500 futures (ESZ15:CME) opened last nights Globex session at 2435.25, and found a low at 2433.00 just before the Asian open. From there, it was a steady grind higher, and a high was made at 2437.50 just after the European open. As of 6:20am cst, the last print in the ES is 2435.75, down 2 handles, with just under 70k contracts traded.

    In Asia, 7 out of 11 markets closed lower (Shanghai -0.45%), and in Europe 9 out of 12 markets are trading lower this morning (FTSE -0.29%). This week’s economic calendar includes 24 economic reports and 10 U.S. Treasury events. Today’s economic calendar includes Productivity and Costs, Gallup US Consumer Spending Measure, PMI Services Index, Factory Orders, ISM Non-Mfg Index, Labor Market Conditions Index, a 4-Week Bill Announcement, a 3-Month Bill Auction, a 6-Month Bill Auction, and the TD Ameritrade IMX. Our View

    There has been a lot of talk about crashes going on. The main topics behind this talk circles around terror attacks, North Korea, private equity starting to sell, lower job growth, and 10 year yields, just to name a few. What concerns me most is the VIX. There have been too many times when the VIX fell below 10.50, then it blow up to 18 or 20 lickety split.

    The continued terror in London is really scary, will the US get hit? I always think around, or after, the June Quad Witch is when things heat up, or around the last week in July, but on the other hand, the markets keep cruising along.

    Our view is that Mondays tend to be a low volume day. That said, selling the rallies has not worked very well over the last few weeks. You can sell the early to mid-day rallies and buy weakness, or just wait for a pull back and be a buyer. The ES is long overdue for a pull back...

    PitBull: CLN osc -29/8 turns up on a close above 4798, ESM osc 30/7 turns down on a close below 2434.48, VIX osc -6/0 turns down on a close below 943.

    Market Vitals for Monday 06-05-2017


    As always, please use protective buy and sell stops when trading futures and options.

    • In Asia 7 out of 11 markets closed lower: Shanghai Comp -0.45%, Hang Seng -0.24%, Nikkei -0.03%
    • In Europe 9 out of 12 markets are trading lower: CAC -0.60%, DAX UNCH, FTSE -0.29%
    • Fair Value: S&P -0.59, NASDAQ +0.66, Dow -4.87
    • Total Volume: 1.7 mil ESM and 4.5k SPM traded

  • #2
    Im guessing weaker employment means the FED can put the brakes on for rate hikes for the foreseeable future.

    Comment

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