Certainly we’ve seen a pickup in volume during the recent downside move — almost 2.5 mil e-minis traded on Friday. That is roughly double some of the recent volumes we have seen as the rally to all-time highs matured over the last couple of sessions. This spike in volume has rightfully given pause to the bulls. Buyer beware! However, at some point the late sellers, selling in the hole hoping to extend the downside price action, will get a bit nervous. That is what the crowd will be watching for, to see if those rallies can breathe or if they will be met with willing sellers. The past few weeks saw a low of 1834.00 on March 27 and that will be a pivotal area with bigger sell stops starting below 1830 area.
Snippets: The following was posted in the chat room and here on March 26: mts2 (13:08) chatter that 3k buyer (avg 1861 area) in the SPM (earlier that day) may have been a hedge for a buyer at the CBOE. someone bought up to 15k deep in the money May 1995p. **Later that afternoon http://www.cnbc.com/id/101528314#_gus
Day two of – So much action, in so little time … so we are going to join the crowd and STFR. However, we have now sold off over 57 handles from the all-time record high printed during last Friday RTH’s morning session. We are now steering down Turnaround Tuesday and a retest of william_blount (10:38) 1844.5- 46.5 pretty big deal this year so far and 1857 area sits above.
Last week the ECB opened the door to extraordinary stimulus measures … Similar sentiment from BoJ and Fed means we have a pretty powerful Central Bank put in place … Pre-Friday’s jobs data comments by Janet Yellen: “economy needs EXTRAORDINARY support for SOME TIME.” “I believe that view is widely shared by my fellow policymakers at the Fed.” “Economy Still ‘Considerably Short’ of Fed’s Goals.”
Today started with 275k ESM and 700 SPM traded on Globex, ESM trading range was 1850.25 – 1861.75. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1856.50 – 1892.00 before settling at 1860.10, down 22.9 handles. The overseas markets were relatively quiet, compared to Friday’s barrage, and did trade modestly in the green. The Ukraine concerns are still out there under the surface as well as China and North Korea, but they are not the headlines that drive the markets – they just add to.
Today’s RTH’s pit session gapped 6 handles lower to 1854.30 – 1854.00, traded an initial low of 1847.40 before trading a new high at a key resistance area of 1857.00 at 9:12 and stepping lower through the midday. william blount (9:06) struggle with the opening — through it 1857/60 doable before a.m. high — real battle already (09:12) ES +10 handles from RTH low. Raphael (09:16) [XLF] showing no mojo slid back thru OR – Raphael (09:30) under 50 gets more serious again ? XLF on lows Raphael (11:16) [DJT], [XLF], [BKX] rocking bottoms plus other sector weakness like bio-tech’s, high beta momentum stock. Friday’s tone had a bit more conviction versus today. So far today, there has no panic, but there is a deep respect for the soft price action we have been seeing during the last couple of weeks of rotation. Since Friday the VIX, fear gauge had bounced from 12.70 area up to 15.90 area by 1:00 today while the e-mini printed a low of 1834.50 at 1:24. Nice jump in the VIX, but the 18 area would garner a bit more attention on the panic meter.
jack_broz (12:34) re SP 1834 target; there is NO support there. there is some at 31.25 but i only point it out so you don’t sell into it or squeeze too many shorts there.
The afternoon session was sideways to higher in much lighter volume when compared to the early to late morning session. After holding the 1844 area the equities quietly faded back. (14:00) MiM – MrTopStep Imbalance Meter showed a small sell side imbalance, then flipped to a small $116M to buy before flopping back to $200M to sell going into the cash close. On the cash close the futures traded 1838.30 area before settling at 1838.10, down 22 handles on the day, while the [VIX] went out 15.57, up 1.61 ticks on the day.
Eco calendar: http://www.investing.com/economic-calendar/
[AA] officially kicked off earnings season post-close. Traders will continue to listen for potential weather-related warnings … Thus far, the preannouncements have been surprisingly light.