News led moves are causing plenty of volatility in the last 6 sessions or so. Our approach is to continue to act at model levels.
For today we are looking at:
- Buy 3331, stop 3226 for 3300
- Buy 3200, stop 3195 for 3245
- Buy 3185, stop 3179 for 3245
- Sell 3315, stop 3222.3 for 3200
- Sell 3277, stop 3282.9 for 3231
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In the Tradechat Rooms
Downhill into the close. Selling ain’t over yet as we had an almost 3B sell imbalance on the close. Those are quickly snapped up so far so no real falling apart.
The market started selling off into the close 2 hours before the bell rang. A bit of buying slowed the selling pack into the 3:30 time but soon resumed its closing direction, down. So far in January, we have had only 6 up MiMs with 12 Down MiMs with a new sell of -1.8B.
A slower pace of HFT program with just 9 yesterday, 4 buys and 5 sellers.
Chart of the Day
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|GLOBEX Session||Day Session|
|High: 3291.75||Opening Print: 3290.25|
|Low: 3273.00||High: 3292.75|
|Volume: 330,000||Low: 3269.50|
|ES Settlement: 3271.25|
|Total Volume: 1.6M|
S&P 500 Futures: China Hubei Corona Virus; 7,783 Infected, 170 Dead
I am not going to do my normal ups and downs today. The ES sold off a 20 handle rally, then rallied 23 handles and then late in the day sold off 20 handles as the 2:50 CT cash imbalance (MiM) went to sell $2.5 billion. There were a lot of late-day Fed headlines but the bottom line is QE4 is alive and well. My feeling on that is as long as the Fed is printing money the stock buybacks will continue to support the US stock market. The other part that the PitBull and I discussed is that the high-frequency bots do not care at all about the coronavirus.
After the 3:00 cash close, the ES made a new daily low by 3 ticks down to 3269.50 and settled at 3270.75 on the 3:15 futures close down -0.30% on the day. In terms of the ES’s overall tone, it acted somewhat weakly but not overly. In terms of the day’s overall trade, volume was steady as 1.6 million futures traded.
Bert Dohmen (@BertDohmen) tweeted at 2:27 PM on Wed, Jan 29, 2020:
How did the coronavirus epidemic start? The official theory is that someone ate bat soup at a Wuhan seafood and animal market…In fact, the Wuhan Biolab’s Dr. Zhou has worked for years on bats and why bats have the virus but don’t get sick. Food markets are filthy.
As of the close, the China Hubei Coronavirus added 1,032 additional cases vs 840 on Tuesday; additional deaths 37 vs. 25 yesterday – China total death toll stands at least 170. While the S&P may have improved the virus hasn’t. A growing number of firms including Starbucks, Google, and Apple have scaled back operations and the China Academy of Social Sciences (CASS) economist Zhang Ming said the Wuhan coronavirus outbreak could cut China’s Q1 GDP growth by ~1% to 5% or even lower as the virus impacts more sectors. In just a few weeks the fast-spreading virus is causing international companies to limit travel to China and airlines are suspending flights. Tens of millions of people in the country have been affected as the government has placed restrictions on movement as U.S. workers are returning from China and being asked to work remotely for weeks at a time as a precaution. Yesterday the S&P sold off in the final hour after Federal Reserve Chairman Jerome Powell offered investors a mixed outlook on the economy, deflating the stock market’s recovery from an early-week selloff.
I know the ES had a big bounce but with APPLE’s earnings and the Fed out of the way I think the China virus is back on center stage. Yesterday I sold 3289.50s after the open and I continue to think we see lower prices. That doesn’t mean the ES can’t bounce but I do not think they will hold. As I said earlier this week, many traders are calling for ES 3150 but I think we need to see a close below 3230 and a break under 3200 to 3180 before we see the ES really start to fall. You can take it from there!
Thursday, Jan. 30
$BX Blackstone | BMO
$KO Coca-Cola | BMO
$LLY Eli Lilly | BMO
$HSY Hershey Foods | BMO
$NOC Northrop Grumman | BMO
$RTN Raytheon | BMO
$SHW Sherwin-Williams | BMO
$UPS UPS | BMO
$VZ Verizon | BMO
$XCEL Xcel Energy | BMO
$AMZN Amazon | AMC
$EA Electronic Arts | AMC
$LEVI Levi Strauss | AMC
$V Visa | AMC
$WDC Western Digital | AMC
Friday, Jan. 31
$CAT Caterpillar | BMO
$CVX Chevron | BMO
$XOM Exxon Mobil | BMO
$PSX Phillips 66 | BMO
Market Vitals Technical Analysis
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