$ES F Holds The Yell, Retests Another Giant Spot For The Pit (1878)
Snippets: The mergers and acquisitions and the uptick in earnings this week led to the early support today. There will be plenty of earnings released during the balance of this week – and the powers that be will lean on the outcome of the data going into next week as the S&P approaches the all-time highs.
Posted yesterday: Therefore, I am going to keep it short – sideways consolidation was the flavor. On the bright side, the bulls keep some pressure on the bears, but the next set of stops rest above the Yell, 1866.25, and the bulls have been knocking on the door trying to see what is above there. So far, no one is willing to extend – lead the charge to convert that level to support.
Chicagostock (09:06) yesterday’s upper vol window was 1865, we closed above that into end of day giving the spill leading into today, if we move +10 off that level gives way into 1875, for now today’s upper vol window first level of resistance, hold above to establish bull bias for today can become a trap.
Today started with 164k ESM traded on Globex, trading range was 1867.00 – 1860.75. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1865.50 – 1856.80 before settling at 1864.40, up 6.5 handles. Existing Home Sales Drop To Lowest Since July 2012; All Cash Buyers, Investors Are 50% Of All March Transactions.
Today’s RTH’s, pit session opened 2.4 handles higher to 1866.80 – 1866.50 marking the early low before extending the premarket gains to 1868.20 followed by a retest of the 1866.00 area – holding the Yell. In our opinion, holding the Yell, 1866.25 area, was the key and the stronger Richmond Fed data supported the ensuing rally that stepped higher throughout the midafternoon. (10:37) ES +10 handles from RTH low and testing double bottoms from early April lows at 1876 area.The volume was not all the great considering the price action extending to 1878.50, but the volume has lacked on many up days – going back to 2013.
Truth be told, it has also slowed since the “60 Minutes” segment when Michael Lewis introduced his latest book “Flash Boys” to the public and the probable backlash from the attention given to the levelness of the investing community – add to that the spring breaks stretching out over 3 weeks and the Easter holiday. Either way, the risk-on crowd previously and wisely locked in some profits as the high-flying biotechs and the high-beta Nasdaq stocks took a brief swan dive – only to see the profits reallocated to other sectors in the stock market. That rotation is actually healthy – whether we see the uptick in volume or not. However, at the end of the day, the S&P is still within that all too familiar range of 1840 to 1880 – aside from the brief rally to the all-time high of 1892 leading up to and immediately following the last employment release on April 4.
Sam_Easley (11:28) this is a gigantic spot (1878) for the pit es. the previous times we got here they puked it only to have the 3rd time make new highs. they will remember it.
Kathy lunch update http://structuraltrading.adobeconnect.com/p85jh5hyu07/
The MrTopStep imbalance Meter, MiM, showed a small sell imbalance of $120M before flipping to $380M to the buy side going into the cash close. Not sure how much influence this had late in the day; iceChat (14:41) Chatter – not sure of the source – 1k US troops have been / going to be airlifted into Poland / region – but we did have the biggest pullback, about 6 handles of the young week before a small bounce. On the cash close the futures were trading 1873.00 before settling at 1873.90, up 9.5 handles on the day as well as the 6th consecutive positive close. E-mini volume on the day was a light 1.1M with the VIX going out at 13.19, down 6 ticks.
Tonight, China kicks off the April flash manufacturing PMIs data from Markit followed by Europe and the U.S. in the morning hours.
Eco calendar: http://www.investing.com/economic-calendar/ We also get German IFO on Thursday.
About 150 S&P 500 companies are scheduled to release results this week, in an earnings season that has been mediocre. http://www.cnbc.com/id/101593664
This was actually posted last Thursday and it has applied to this week’s tape as well … Chance (13:01) thin to win all the way…I typically refrain from shorting these slow grindy markets – i say that and watch this damn thing rollover. It is safe to think others had the same feeling. After all, it is hard to buy the highs of a market on the verge of breaking out and there have been very little in the way of pullbacks to jump in on the weakness.