The Asian and European markets were down. The ES sold off overnight, but bounced before the 8:30 CT futures open. Goldman Sachs (NYSE:GS) thinks stock ‘buybacks’ are overrated, and the price of bitcoin surged past $9,000 for the first time over the weekend, a rise of nearly 900% this year. The cryptocurrency now has a total market capitalization exceeding $300 billion, just as the CME is about to start offering it to the public.
Republicans are under pressure as the year-end agenda looms. The government runs out of money on December 8, and Trumps tax cut plans are still up for grabs as the ES made its 56th new all time contract high in 2017. It’s a fair question to ask… Is everyone on the same page? I don’t think they are. UBS is looking for the S&P to trade 2900 next year, but Larry Adam of Deutsche Bank (DE:DBKGn) has a 2,650 target over the next 12 months, a call he and his team reiterated two weeks ago.
The S&P 500 futures (ESZ17:CME) trading range on Globex from Sunday night into Monday was 2604.50 – 2596.50, with 190k contracts traded. On the 8:30 CT bell, the first print in the ES was 2601.75. Right after the bell, the ES pulled back under the vwap at 2600.50, and then rallied up to 2605.50, taking out the Globex high by 1 handle, and locking in a new all time contract high. After the new high was made, the ES stutter stepped back down as the Nasdaq sold off. The selloff took the ES down to 2597.75 before levelling off and trading back up to 2601.25. Total volume at 11:30 CT was only 550,000. Clearly not everyone had returned from the holiday.
As lunchtime rolled around, the ES rallied a few handles off the 2597.75 intra-day low, and then started to grind sideways. The already low volume was drying up even further. At 1:00 the ES had traded up to 2602.25, total volume including Globex was 640,000 contracts. Going into the close, the benchmark futures had spent the previous 3 hours trading in a 1.5 handle range. When the MiM came out showing small to sell, the ES reacted in kind, essentially doing nothing. In the end the S&P 500 futures (ESZ17:CME) settled at 2604.75, up +0.75 handles, or +0.02%; the Dow Jones futures (YMZ17:CBT) settled at 23,562, up +45 points, or +0.19%; the Nasdaq 100 futures (NQZ17:CME) settled at 6413.25, down -0.25 points, or -0.003%; and the Russell 2000 (RTYZ17:CME) settled at 1513.30, down -5.20 points or -0.34% on the day.
As always, please use protective buy and sell stops when trading futures and options.