Funds typically mark up stocks on the last day of the month and through the first three days of the new month. Ahead of that, we often see strong liquidation as well as buying at the lows. That’s what we saw today, though the move was unusually strong with index arbitrage sell programs dominating the falloff after the morning rally.
The MiM showed a strong sell of over half a billion and the MOC turned out to be a full $1 billion. That points to a lot of liquidation of positions by big players, with the index arb following along to take advantage of the premium.
The S&P rallied from the pre-open and reached a high just shy of 1980. After that, it was major selling all the way down to a trendline which marked yesterday’s low as well.
In this kind of market, it’s important to pivot and not hold for too long. We were buyers at the open, then sellers for most of the day. The low will be a great place to look for a buying opportunity tomorrow.
HIGH: 1979.50 Mid-Morning
LOW: 1964.50 Just Now
LAST: 1965.90 DOWN 7 Handles
TOTAL VOLUME: 1.4mil minis; 4.2k bigs
MOC: SELL $1 BILLION
U.S. and Europe imposing new sanctions.
FOR TOMORROW:
Things start to warm up starting tomorrow
MBA Purchase Applications
ADP Employment Report
GDP
EIA Petroleum Stats Report
7yr. Note Auction
FOMC Announcements
They usually mark stocks up on the last and first 3 days of the month.
Early rally – saw the highs – didn't think they could sell off so hard – big time index arb sell programs.
Sold em today, buy em back tomorrow.