Today’s economic calendar includes Weekly Bill Settlement, Jobless Claims 8:30 AM ET, Retail Sales 8:30 AM ET, Import and Export Prices 8:30 AM ET, Bloomberg Consumer Comfort Index 9:45 AM ET, Business Inventories 10:00 AM ET, EIA Natural Gas Report 10:30 AM ET, Fed Balance Sheet and Money Supply 4:30 PM ET.
Wednesday’s trade started with the Asian markets down and the European markets up midday. The overnight Globex range in the S&P 500 futures (ESM18:CME) was 2789.25 to 2796.00, with 245,000 contracts traded.
The first print off the 8:30 open was 2792.00. After the open the ES did a little back and fill, staying in a four handle range for the first hour. After retesting the Globex high at 2796.00, the ES sold off 10 handles down to the 2686.00 level, did a little more back and fill, traded up to the vwap at 2792.50, and then flunked lower as the fed headline hit the tape. From there, the ES sold off down to 2784.50, bounced a little, and then made a low at 2781.25 around 1:35.
After the low the ES ran up to 2789.25, had one last pullback down to 2784.25, and then shot up to 2793.50 at 2:09 CT. The next move was back down to 2784.50 at 2:45 while the MiM was showing buy $380 million to buy. The ES sold off down 2783.00 as the MiM flipped to sell $30 million. At 2:50 the ES sold off down to 2781.75, and then down to 2779.50.00 as the MiM went to over $800 million to sell. On the 3:00 cash close the ES traded 2780.25 before settling the day at the low tick of 2778.50, down -9.75 handles, or -0.35% on the session.
In the end, the ES rallied, and the ES fell. Did it have much to do with the fed’s rate hike? I guess the answer is that it did, but the ES and NQ have been going up for several weeks and were overbought. Does this mean the high is in for now? I do not think so, but I think a pullback is probably a good thing. In terms of the ES’s overall tone, obviously it didn’t act that great after the fed, but the selloff was not that dramatic. In terms of the ES’s overall trade, it was the best volume day of the week.
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