The Wednesday CHOP

Charts, Commentary, News, The Opening Print

The S&P 500 futures (ESZ19:CME) closed at 3111.00 Wednesday, about 5 points above its opening print of 3106.50, after closing Tuesday at 3091.00. Its trading range (3081.75 – 3119.50) was unremarkable to the exclusion of boredom coming back into play. 

There’s that China thing again, this time on the positive side. Macroeconomic signals still suggest range bound if not lower prices for stocks. My sense of direction comes from debt instruments and currencies. The ES, at this point in time, just reacts far too dramatically upon the slightest of news.  My fear is that the public perceives whatever deal is inked with China will result in a “sell” signal, when the rest of the world thinks the market’s going to the moon.  

The MiM

Just after 2:00 CT the MiM started showing over $1.2 billion to buy, and not long after the ES sold off from its daily high at 3119.50 down to the 3114 area. At 2:32 the ES traded down to 3114.00 as the MiM dropped down to $808 million to buy, and then rallied a few handles up to the 3116.50 area. 

On the 2:45 cash imbalance reveal, the ES traded 3115.50 as the final MiM remained $808 million to buy, and jumped to $1.4 billion to buy at 2:53. The futures then went on to trade 3113.00 on the 3:00 cash close, and settled at 3110.75 on the 3:15 futures close, up +20 handles, or +0.65%, on the day.  

In the end, the overall tone of the ES was like night and day; going from weak Tuesday, to very firm yesterday, to selling off going into the close. In terms of the days overall trade, total volume was 1.4 million ES contracts traded. 470,00 of that came from Globex, meaning 780,00 traded on the day session. That’s down 730,00 from Tuesday’s 2.15 million contracts traded.

The Dollar and Euro

Movement in the Dollar (DX 12-19) and Euro (6E 12-19) continues to make sense. I’m even starting to think the Euro will move higher once the Pound finds a home, and that looks to be distinctively higher. OK, let the Pound chip away at the Dollar before playing “tag” with the Euro to continue the decline.  

We’ve taken a position in the Euro and would like to hold it for a couple months. It is teed up to run; the only country that could possibly lower its interest rates is the United States, and although unlikely (you really do not want this other than to help the Dollar decline), it could happen.

Soybeans

Welcome to the world of trading beans; that is unless you have traded with me before. It’s like clockwork so just keep following the charts, the plantings, and me as well. Once you learn more about these commodities you will trade less, make more and live a normal life… Yeah, what’s that?

Natural Gas

Here comes winter and the “widow maker”. You’re going to see a lot of talk, people who have information about the weekly reports, surprises for certain, but more a great time to learn. My bet on this one is down through April of next year. Even Canada came out yesterday and said this is going to be the easiest winter they’ve has seen in years, and that’s where our weather comes from. Either way, watch the charts. Learn the charts. This one says, if you are a buyer, stay away.

We’re getting close in being able to enhance what we provide for you on a daily and ongoing basis.  Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight and teach when time allows. In the interim, thanks for reading what we post, and enjoy your trading week.


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

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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