Index Futures Net Changes and Settlements:
Foreign Markets, Fair Value and Volume:
- In Asia 9 out of 11 markets closed higher: Shanghai Comp +0.31%, Hang Seng +0.77%, Nikkei +1.24%
- In Europe 13 out of 13 markets are trading higher: CAC +0.24%, DAX +0.19%, FTSE +0.79%
- Fair Value: S&P +3.17, NASDAQ +24.47, Dow +4.43
- Total Volume: 1.61mil ESU & 729 SPU traded in the pit
Today’s Economic Calendar:
Today’s economic calendar includes Jerome Powell and Mario Draghi speak at an ECB central banking forum in Sintra, Portugal, at 9:30 a.m. ET., and U.S. existing home sales at 10 a.m. ET.
S&P 500 Futures: #ES Tanks After Trump Threaten China With Additional $200 Bil In Tariffs
I am going to skip all the world markets and Globex stuff only to say that the Asian markets got killed and Europe was down hard. Almost 400,000 S&P 500 futures contracts traded before the 8:30 CT open.
I was long with a 3 or 4 handle profit on Monday’s close and stayed with them thinking (don’t think / just trade) the ES was going higher, and while I was watching the boob tube I looked over and saw the ES drop like a rock. The news about President Trump’s new China tariffs hit the news wires and the ES went tumbling lower. The news also rocked stock markets in Asia; Shanghai fell almost 4% and Shenzhen tumbling 6%, while Hong Kong fell more 2%. I turned a small winner into a 12 handle loss. Then I bought them again, and got smoked again.
Monday night, after making an early low at the 2752 area, the ES made several lower lows and had several small short coving rallies, eventually making it all the way down to 2735.75 at 2:15 am, as the major Asian markets tanked. The futures traded 2551.00 on the 8:30 open, popped up to 2758.75, and then sold off down to 2746.25 at 9:47. From there, the ES then made three higher highs at 2758.75, 2761.00 and 2764.00 going into 11:00.
After a selloff down to the vwap at 2754.25 the ES rallied up to new highs at 2769.00 at 2:00 as the MiM started to show $600 million to buy. The futures then pulled back as the MIM went to buy $110 million, and traded 2662.00 on the 2:45 cash close as the MiM ‘flipped’ to sell $200 million. On the 3:00 cash close the ES traded 2766.25, and then went on to settle at 2766.00 on the 3:15 futures close, down -12.25 handles, or -0.44% on the day.
In the end it is exactly what I have been saying… the ES takes bad news and makes good of it. Trading is one big learning lesson. I knew there was the risk of Trump adding another $200 billion in tariffs on China, I just thought I was smarter than the markets. Once all the selling dried up, and the hedging, margin selling, and people rolling down their option positions were done, in came the short covering rally. It’s a pattern we have seen a thousand times. As for the days overall trade, there was big ES volume, 1.58 million contracts traded.
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