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Market Review

GLOBEX

(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 3295.00Opening Print: 3278.25
Low: 3271.00High 3300.50
Volume: 266KLow: 3277.74

ES Settlement 3299.75

Total Volume   1.28 Million

S&P 500 RECAPTrade Date 08/04/ 2020

Following a sideways to lower overnight session the S&P 500 futures opened yesterday’s regular session down 10.25 handles at 3278.00, dropped a tick and then began a higher climb through the morning pushing up to a 3295.75 high before 10:00. The late morning led to a sideways chop that gave way to a modest pullback in the afternoon as the ES traded back down to the open just before 2:00 and then rallied late in the day up to new highs at 3300.50, settling the day at 3299.75, up 11.50 handles or .35%. 

In terms of the price action, it was about buying the open in the morning, then the afternoon pullback, leaning on the opening print. It was another day of thin to win higher. Total volume was a modest 1.28 million. 


Economic Calendar


Closing Prices


In the Tradechat Room

MiM


A 15-point sell-off into the close with the MiM displaying a buy set up a great opportunity to buy the close. At 15:25 our MiM flipped to sell and the market rally stopped and basically waited for the 15:50 reveal which was a 400M buy (small) and just big enough too rally us into the close.

Questions?  Please email me: Marlin@mrtopstep.com

Get the skinny when we get it:  Join the MiM. 


Covid-19

Top 10 Worst
Top Ten Best

We continue to track Covid-19 across all 50 states, DC, and Puerto Rico to gain a better understanding of what is happening. While detected cases continue to expand, we are not seeing the equivalent expansion in hospitalizations and deaths. Our table uses 7-day averages and takes a 5-day linear regression slope in order to detect changes as quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).

A nice drop in new cases in FL down about 30% from mid-July. We need to see deaths rollover. We do see it in our hospitalizations.
A bump in the road for Texas. We need more and consistent data from the state to truly understand what is happening there.
CA is improving, down about 20% from its end of July peak. We would like to see the pace really pick up here.

We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M), looking at daily deaths, but more importantly, changes in the count.

Anticipation is making us wait. We are at the end of the week and numbers should pick up as we start to report daily numbers. FL should easily beat its O/U number of 9,446 today putting in what we think will be under 6K new cases. Deaths need to be under 217. Yesterday’s count of 247 caught us off guard a bit but we are confident that we will be putting in less than 200 consistently over the next week.

Texas had a blip on new cases, we want to watch that but we expect a to see a roll over soon with a peak of about 200 using a 7-day average.

CA is following FL with about a 7-day lag meaning we should have the peak in daily deaths this week.

Over / Under

These are the over/under numbers for 7/31/2020. In order to push the 7-day average lower, today’s reported numbers need to be lower than the target number. A new case or death number that is higher will increase the 7-day average.

Yesterday’s over/under numbers and actual are also in the table.

YesterdayYesterdayTodayToday
StateCasesDeathsCasesDeaths
Florida9,230 / 5,446191 / 2479,446217
Texas8,342 / 9,167164 / 2459,042313
California6,000 / 4,52673 / 1138,755197
New York534 / 7469 / 37156
Yesterday’s number are the over-under number / actual. An actual that is greater than the over-under number will send the 7 day average higher (not good) a lower number will send the 7 day average lower (good).
Use today’s number to watch the releases to determine the trend.

To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.

Wear your masks!
Stay Home!


Chart of the Day

Goldman Sachs

Top Stories on MTS Overnight:


Our View

#Disney Posts $5 Billion Loss; Stock Rallies 5%

I personally have never been to a Disney theme park and nor have I ever gone on a cruise ship. I know a lot of folks love both but I am really not interested in either. If I had to go to one or the other I would choose Disney because seeing all the mishaps on cruise ships just isn’t for me. That all said the pandemic has triggered a 42% drop in Disney’s quarterly revenue. I have to ask: Without the US government aid packages, where would either industry be? How long can the US support companies that are never going to get back to the pre-COVID income levels? And what do you think will happen when the colleges start sending students home after the flu season begins. I am going to say it like it is… COVID19 is now and into the future going to ravage the United States economy when the second wave begins in the fall. At its current level, 160,000 people have died in the US. As grim as this prediction is I think total deaths from COVID19 in the US will reach over 300,000 in the next six months. Hospitals will be at capacity and there is absolutely nothing anyone can do about it. At that stage I think over 50% of the US population will be infected and for what? All because some people think it’s still just the flu and refuse to wear masks and self distance? I have news for you, this is going to take years to resolve and the ‘fake’ rally we are seeing right now will turn to dust. 

More than anything I hate thinking or writing about this but turning a blind eye and thinking the current rally in stocks is sustainable is never going to happen. As the election nears and people take to the streets the VIX is going to soar and the S&P is going to tumble.

Our view, I do not see an end to the most hated rally in history right now but I seriously believe the higher the NASDAQ and S&P go the harder it will fall. It’s not if, it’s when. Our lean, if the ES gaps up 10+ handles on the open I intend on selling it, buying the sell-off and looking for the midmorning low to be a buyer. If that all pans out I will pull back away from my computer to avoid the midday chop and come back to play the MIM. I am sorry to paint such a negative picture but I do not believe people have fully gauged the impact of what’s going on and that scares me! 

Danny Riley is a 39-year veteran of the CME  trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.


Market Vitals Technical Analysis

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