After making new all time contract highs, the ES sold off Wednesday night and into Thursday mornings Globex session, down to 2499.00, on total volume of 175,000 contracts traded. On the 8:30 CT futures open the ES traded 2501.00, and did a few small ‘drops and pops’, making and early low at 2500.00. From there, they rallied up to a 2505.75, where it double topped, then pulled back 1 tick under the vwap at 2502.50. Going into 1:00 pm CT, the ES did trade back up to 2508.25.
The lower volumes were all part of what we call ‘thin to win’. Unlike Wednesday’s trade, which included talk of higher rates and health care and tax cuts, yesterday’s trade didn’t have any major news or headlines. The overall trade was muted.
After making the high at 2508.25, the ES pulled back down to 2505.50. If you were trading the short side, the best pullbacks only offered a few handles, and if you were not quick, the ES moved right back up. The main thing people were watching was the yield on the benchmark 10-year treasury note, which climbed to 2.326% from 2.309% Wednesday, when it notched its biggest daily gain since March. At 2:30 pm CT, the MiM was showing $213 million to buy, and the ES sold off down to 2505.00, as the NQ sold off slightly. The 2:45 cash imbalance showed a NYSE NET Buy of $570 million, and the NQ shot back up, taking the ES back up to the 2507.50 area.
I am sorry I can’t write much more. It was another quiet day on a list of many lately. In the end the S&P 500 futures (ESZ17:CME) settled at 2507.75, up +3.25 handles, or +0.13%, the Dow Jones futures (YMZ17:CBT) settled at 22320, up +22 points, or +0.09%, the Nasdaq 100 futures (NQZ17:CME) settled at 5938.50, down -2.50 points, or -0.04% and the Russell 2000 (RTYZ17:CME) settled at 1492.60, up +4.70 points, or +0.31% on the day.
October Almanac: A Choppy Month in Post-Election Years
From Stock Traders Almanac:
A big upside move of over a 5% gain on the S&P 500 during the Worst Six Months (or the “Sell in May” period) from May through October has been followed by great gains for both frequency and magnitude. There is just one month left in the Worst Six Months. So if the market can log further gains in October and not succumb to often self-fulfilling prophecy of Octoberphobia and the curse of the 7th year that would be a solid indication for stronger gains over the next Best Six Months (November to April) and 2018.
We currently sit at +5.3% for the S&P 500 since the close of April 2017. Not bad, but not great, and right on the cusp of the level of Worst-Six-Months gains the have been more often followed by big upside moves. Look at the three tables below of “Not Bad”, “Great” and “Bad” Worst Six Months. Bad and Great were both followed by better Best Six Months returns than the Not Bad years.
Also for perspective we have included performance for the full year and the next year. Bad WSM usually accompany down years, but better following years. Great WSM have been part of up years 100% of the time and decent following years, while Not Bad WSM has occurred in better years but weaker following years.
While You Were Sleeping
Overnight, equity markets in Asia and Europe traded higher across the board, as they prepare to close out their best month of the year.
In the U.S., the S&P 500 futures opened last night’s globex session at 2507.75, which would be the overnight high, and were held to just a 2.25 handle range. As of 7:10 am CT, the last print in the ES is 2507.00, down -0.75 handles, with 103k contracts traded.
In Asia, 8 out of 11 markets closed higher (Shanghai +0.29%), and in Europe 9 out of 12 markets are trading higher this morning (FTSE +0.64%).
Today’s economic includes Personal Income and Outlays (8:30 a.m. ET), Chicago PMI (9:45 a.m. ET), Consumer Sentiment (10:00 a.m. ET), Baker-Hughes Rig Count (1:00 p.m. ET); Fedspeak — Patrick Harker Speaks (11:00 a.m. ET).
Last Trading Day Of September
Our View: I don’t know… I think the old adage applies; never sell a quiet market! If it stays like this, 2521-2514 is on tap, and above there it goes to 2518-2520. You can take it from there…