|30 min ES|
Today’s session was a nearly 100% repeat of Monday’s save the drop from 2013 highs of 1569 into 1561 where the ES currently resides. Our TFP morning letter target of 1568 was met today so if any of you rode that wave, nice work.
The tape today was initially softened by the 30 year and 10 year bond prices pushing higher in the hour leading up into cash open. This softening ‘phenomenon’ is highly related to derivative tied ETF’s which are out of control in their reach, the program traders know this and exploit.
From 8:20 on the ZB jumped from 147’06 up to 147’16 sending the ES from 1563.50 down to 1554.75 which at this point the ZB and TY bidder finally backed out of the market and the ES picked up its pants rising into a 1569.
|30 min zoom|
I find the print of 1569 highly interesting because of the much reported sale of 1k big S*P contracts by GS via the floor all while someone paid up for a few thousands contrats of the ES on the 1569 print.
That alone is not what makes the story interesting, the fact 6E (eur/usd) printed the day high of 1.311 precisely @ 13:45 hrs, the same 1 min period the ES traded into 1569. ARBITRAGE.
|ES over 6E. time axis aligned|
Now we have the ES off 1.75 points or 0.14%, WHICH funny as it may be is the EXACTY amount 6E futures are down 0.14% @ 1.3086 with 1.308 acting as support.
So that being said the euro was strong all day helping to provide a underlying bid for the ES, as it has done in the past.
My thoughts going into the evening is watch 6E for bids, then watch the ES and see if it reacts; it likely will.
Currently the 30 year bond is unchanged @ 147 (WHERE IT HAS GRAVITATED ALL DAY) after trading into a low of 146’24. Below 146’23 should help to keep the ES over 1560, but honestly i think ES trend is more importantly associated with what 6E does into the night/morning.
|30 min CL|
A break under 1559 in ES will send us back to 1555.25 under 55 = 1551.25 so on and so fourth down to 1544. Upside reversal will not happen until we get back over 1565 on the mine which will hopefully coincide with 6E back near 1.310.
|5 min CL|
When looking at crude, our target of 94 was met after the 93.80 was broken to the upside which led into a high of 94.48. Funny because we have been talking about the penchant of CL to trade into the .50 metrics.
Currently CL is offered down 0.30 cents or 0.32% as i type this 93.90 is being tested and wil likely fail as the ES is on lows of 1561. 5 min support in ES is 1557.25. CL support is 93.75 under 93.90.
Simply reverse the path CL rose into the high today to get your downside levels.