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(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 3179.00Opening Print: 3169.50
Low: 3106.50High 3210.50
Volume: 450,000Low: 3168.50

ES Settlement: 3187.00

Total Volume: 2.34M

MrTopStep Opening Print : JOBs HOAX?  

The May jobs report added 2.5 million jobs and the jobless rate fell 13.3%, from 14.7%, which was the highest on records dating from 1948. President Trump was quick to praise the better jobs number as evidence that the U.S. economy is rebounding from the Covid-19 crisis at an extraordinary clip!  Sounds good right? Well… the Bureau of Labor Statistics’ conceded that a “misclassification error” during the agency’s data-collection process made the unemployment rate look significantly lower than it really is. 

The ES  futures were trading high before Friday’s jobs report and jumped sharply higher after the report at 7:30 AM CT Friday morning. The ES traded 3169.50 on the 8:30 futures open, up about 24 handles from the previous cash close, down ticked one handle down to 3168.50, and then went into a big back and fill pattern for the first hour of trading. After a small pop up and a drop back down to 3172 the ES started to get hit by several early buy programs and shot up to 3210.50 at 10:30. After the high, the ES pulled back down 3189.50, made a lower high at 12:43, and then made a sequence of lower highs and lower lows. At 2:15 the ES traded down to 2:20, and bounced back up to 3199.25 as the MiM showed $280 million to sell. At 2:43 the ES traded 3188.50,up 75.75 handles or +2.35%.

The ES traded 3185.50 as the 2:50 cash imbalance showed $1.2 B to buy, traded 3190.00 on the 3:00 cash close and settled at 3187.00 on the 3:15 futures close, up 73.25 handles or +2.35% on the day. In terms of the ES’s overall tone, it was amazingly firm. In terms of the day’s overall trade, 2.34 Million ES traded with 450.000 coming from Globex making total ES day volume 1.89 million.


Economic Calendar


Closing Prices


In the Tradechat Room

MiM

We set a low candle at 14:35 pm as Trump, during a meeting with Maine fishermen, was hearing how China charges 40% on lobster imports from the US and Europe 20% while Canada is charged no tariffs and fishes the same product from the same waters. Speaking off the cuff, Trump said we can fix this, “David” look at charging Europe tariffs on imported cars Those headline readers are quick! We dropped 8 points down and up in 2 minutes.

Heading into the final hour at 14:48 we poked a closing high at 3203 as the MIM was showing a 716M buy, but the enthusiasm on what had been a strong day waned down to 3186.50 around 15:20 where the MiM was signalaing a flip in the MOC. Just before the reveal at 15:50 the MiM was showing 279 to sell and the actual locked MOC was 1.2B. That pushed us from the 3181 low back up to a 3190 close.

Reminder:  June is Russell 2000 reconstitution month.  Here is the schedule for that: 

  • Friday, May 8 – “rank day” – Russell US Index membership eligibility for 2020 reconstitution determined from constituent market capitalization at market close.
  • Friday, May 22 – “query period” begins – preliminary shares & free-float information for Russell 3000 Index constituents are published daily & queries welcomes (query period runs through June 12)
  • June 5 – preliminary US index add & delete lists posted to the FTSE Russell website after 6 PM US eastern time.
  • June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
  • June 15 – “lockdown” period begins – US index adds & delete lists are considered final
  • June 26 – Russell Reconstitution is final after the close of the US equity markets.
  • June 29 – equity markets open with the newly reconstituted Russell US Indexes.

Questions?  Please email me: Marlin@mrtopstep.com

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


Chart of the Day


Top Stories on MTS Overnight:


Our View

#GeorgeFloyd #Protest #COVID19 #Hurricanes And The #ES

It was during the credit crisis in 2008 that I started using the sayings, “we live in an ever-changing world” and “nothing stays the same for long”. At the time I was not thinking of a virus or the death of a black man at the hands of a police officer from Minnesota setting off mass, worldwide demonstrations and looting in the US. I am not downplaying the importance of ‘black lives matter’  but defunding police departments is neither sensible or possible. I think we all know the riots, looting, destroying and setting fire to businesses and property have not worked in the past and probably will not work now but peaceful marches and finding common ground can be the start of a beginning in American history and not just for black people but for people of all races and colors. I am all for that but I also believe that we have a full-blown ‘PANDEMIC’ on our hands and that the protests have highlighted America’s total lack of ‘common sense’. Just as cases were starting to drop, thousands of people flooded onto the streets of nearly every city in America, exactly what Dr. F and the CDC said the public should not do. I have made (and I am not happy about it) several COVID19 predictions, from shutting down flights to and from Europe to entire cities being locked down to the cancelation of the Olympics and professional sports and my final prediction was for rioting in the big cities.

If you are a trader and everyone thinks the markets are going up and you say they are going down and as they start to pull back and a negative headline comes out and the markets fall sharply, you were right. It doesn’t matter why the markets went down, they went down! Well that’s how I feel about COVID19, we were warned, people knew and now cases are going to soar. They are already surging, the State of Florida logged a record of 1,433 new cases of COVID-19 on Saturday. The astonishing number comes as Florida’s death count hits at least 2,700 — although new reporting suggests that Florida may be suppressing numbers of out-of-state residents, including “snowbirds,” who died in the state.

What do you think will happen in the coming weeks? More cities are about to open up and you know what? The cases will rise. Businesses that were going to open up will rethink and ones that were on the fence, well you already see what they decided, they are closed for good. The other part of this and part of my prediction is that the ‘protests’ are not just going to last two weeks, they are going to go on all summer and right into the election. I am not saying they will be as big but they will continue. The problem? How can you safely send employees back to work with street protests and a new wave of COVID19? It is clearly a mess that is going to get worse before it gets better. When the lockdowns started in March we were in the first inning and as more things open up we should be in the second inning but we are somewhere in between.

Our view, It’s not impossible that the ES rallies to 3300 or even to new highs but I don’t think the next 200 handles come as easy as the last 200. I know I called for selling the open last Friday and buying the midmorning pull back but the ES gapped high, hung a few handles off the open and then roared higher. I told the MTS forum not to sell but I didn’t listen to myself and my late day rip didn’t work either. That said, today starts a new week that includes the NFIB Small Business Optimism; JOLTS Survey; Wholesale Trade; CPI; PPI; Initial Claims; Import Prices; University of Michigan Sentiment Survey; FOMC Meeting. One would think the riots and mass protest over the last several days would spook the markets but the ES rallied all the way up to 3211.50 on Globex and are trading 3197.25, up 12 handles. Our lean is to sell the rallies. The ES is ‘overbought and overextended’ and from 3200.00 I think the next 50 to 60 handles are down. 

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.


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