The Standard & Poor’s announced that on June 3rd 2011 AMB Property Corp. will replace ProLogis in the S&P 500 index,. AMB is acquiring ProLogis in a deal expected to be completed on or about that date pending final approvals. AMB Property will be renamed ProLogis Inc. and will trade under the ticker symbol PLD.
“1319’s 50DAY PASSING GRADE”
Coming into yesterdays trade, the Euro currency was firm in overnight trade on reports of China’s appetite for Portugal’s debt. Those gains were surrendered after comments by the head of Euro-Zone finance ministers JC Juncker – “the European Union would be unable to step in if the International Monetary Fund withholds its portion of the installment”. Trading on the headlines tends to be volatile…The equities have been trading sideways to higher over the last couple of days, only to be slammed on the close. The recent trend of softening economic data and macroeconomics has been weighing on traders optimism as global economic growth/stability continues to show signs of stress. Over the last week or so the bulls have not rolled over – as the morning to mid day strength has flipped much of the selling momentum. Yesterday’s low in the VIX was15.90. But those late day downside spikes make being long difficult starring at the ominous afternoon fade. During the holiday weekend we will miss the Euro Zone headlines… Bring on the – three day banger all ready!!!
Yesterday started with 358k Emini, 2.1k SPM traded on Globex and a RTH open range 1315.00 -1315.50, down just over one handle. The initial move was testing 1319.50 day avg area before being rejected, back and filling to the LOD 1312.70. Mid morning was sideways to higher in the 1313 -1317 area before catching a bid and stepping higher through the early afternoon as the HOD 1327.30 traded by 1:45CT. The following hour was sideways to slightly lower as the bulls took some profits and stood out of the way of pending cash close. 29 /30 DJIA were for sale – and the cash imbalance showed $500M to sell pushing the SPM to 1323.50 area before Goldman stepped up and flipped the shorts buying about 1,100 SPM on the 3:00 cash close. Settlement was 1326.50.
Today’s Mr. TopStep
The Risk-off in front of the long Holiday weekend trade
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OUR VIEW
Friday? End of the month money going into stocks and commodities, everyone short and a 3 day weekend spells slow and to the upside. We said yesterday that overall we don’t like the markets but that we thought there were going to be some month end buying around and on the instant message Mr. TopStep pointed out that it was too slow to be a seller and we put out Top Notch’s number at 1328.70 as out upside objective (HOD was 1227.30). If you a BEAR you have to be concerned about how firm the markets are acting. And the BULL’s are cheering that the recent down slid onslaught has at least subsided for now. In the last 2 day the SPM is up 12.9 handles. It is 5:30 am the SPM is up 1 handle at 1327.50, crude is up .32 cents at $100.55 and the EC is trading 142.33, up , up 96. The way we see it the big tip off that the SPM was going to rally was how firm the EURO was and its doing it again today. In Asia 9 out of 10 markets closed higher. In Europe 10 out of 10 markets are trading higher. Our view? Is simple; if you make a little early quit. After Europe closes the markets are going to get real quiet. If we had to trade we would lean to buying weakness. Keep an eye on the 10 handle rule today and use stops.
Have a great 3 day weekend and we want to thank everyone for being part Mr.TopStep!
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FROM THE FLOOR / NEWS & OBSERVATIONS
TOPNOTCH – These index futures signaled early on a trade like this could be in the cards. The fact that neither one could take out yesterday’s lows has led to an assault to yesterdays highs and as of this writing, the nasdaq has obliged taking out its high of 2321.50 from yesterday and on its way go a stop target of 2325.50. If stops are triggered , this future will look to test its daily fib of 2330.75, followed by a tough resistance level of 2333.50. One must remember though that the overall objective is its settle gap price of 2343.50.
The S&P bounced from its initial low of 1312.70 to a high of 1317.20, rejecting its downside # price of 1317.80 and initial high of 1319.00. When this future went back to assault that first low, it stopped dead at that same low of 1312.70. That double bottom was huge!!! This then led to a high of 1317.40, which once again flip-flopped that open range. However, when this future made a low of 1315.20, it held its opening range and that was all she wrote as new highs have been seen at the 1322.10 price. I would think another move higher is coming as this future is still in an inside trading range from yesterday. Looking now to test the 1323.30 price, followed by objectives of the settle gap price of 1327.80, the daily fib of 1330.00, and key resistance of 1331.80. Not that I like picking tops, but I would give the daily fib to that 1331.80 area a good shot to short. Thinking a 5-6 handle break will occur if that area is tested.
The bonds never looked back after taking out its initial high of 125.16. It’s first fib objective was seen of 125.29 and still is the high. This future hasn’t been able to trade back under its earlier week high of 125.20, but a turn comes if a offer goes under 125.19. The 125.12 price will then be key and another turn there could see the 125.06 price. A move north and tests of 126.05 and key resistance target of 126.16. & year note auction could lead the next move for the bonds.
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HEARD ON THE MTS IM:
eubie (06:19:34 AM): YEST RANGE 1309.00′s / 1324.20′s (FV-1.90 1318.50 CASH / 1316.60 SETTLE)
george (07:59:51 AM): long weekend ahead looks like the “flight to quality” ;( buying of treasuries is getting an early start
eubie (08:34:16 AM): DXY -.66% / stocks shud be up?
george (08:45:18 AM): medley story going around saying the fed will stop the reinvestment of mortgage proceeds around Aug or Sept meetings
eubie (09:13:11 AM): BBands off screen 1312.50′s
MTS DESK (09:19:34 AM): do not think so but nervous shorts – stops above OR 1316 area
eubie (10:04:01 AM): BBands off screen 1313 now / potential 2X min charts 1312.50′s
randy (10:40:56 AM): 3 day pivot and Opening print stacked on 1315′s….important test here now
george (10:55:42 AM): long weekend, buyback, auction, all add up to a test of the important 123.20 level in tym1
MTS DESK (11:25:38 PM): well into the NY lunch time / 40 locals in the pit / 4.7k SPMs and a total of 1.34mil ESMs have traded / roll time for the JUNE contracts in the SEPT / not going to help the day traders SPM/U is –540@-535 600 by 2k thinking up all day the -540s trade 1.1k times / firm and slow here traders almanac says tomorrow is traditionally thin and slow / say hello to the 4 day weekend
eubie (11:50:30 PM): + 1133 tics
eubie (11:55:14 PM): BBands going off screen 1322.50/1323′s / 10 HANDLE RULE IN EFFECT /
MTS DESK (11:22:17 PM): there will be a pull back but there is no fighting this / 3 week a 3 days of down going into the long weekend and we are seeing a steady stream of short covering mixed in in with buy stops and buy program
bob (12:35:37 PM): why was he raising rates in the first place? he couldn’t see commodities coming down? that rate hike was clearly in response the the fear….if he had only been here in the MTS room and listened to Eubie he would have known commodities would be coming down – come on Trichet, come to MrTopstep!
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ECONOMIC CALENDAR
Mr Topstep Economic Calendar
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CONTRIBUTORS’ CORNER
“UNDER THE HOOD IN THE S/P’S”
Roger Volz / BGC
SP 500 futures Very Short Term (VST) 5 min chart. VST OB > 1326.50 …..VST OS < 1312.50
SP 500 Futures Daily working technical model…..lower lows lower highs leaves bulls in search for start of higher low base. Our previous momentum loss line at the 34-day SMA at 1332.30 now becomes the top of the immediate range. Charts would move into retest of lows mode with retake of the next downside break line at 1309.80 Close below this line exposes an air pocket to 1297.50 where the next ledge of grouped support lay. The first ledge of grouped resistances at 1324.50 holding underside test for day 3
SP 500 Futures Weekly working technical model….currently testing our key to the uptrend from Sept 2010 at the 21-wk SMA (light blue) at 1313.55. Support follows at 1307 for continuation to 1287. Resistances firm at 1333 and 1342
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