RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We have seen quite the move in the Dec E-mini-SP from yesterday’s low of 3590, reaching a high this morning of 3777.25 and currently trading at 3738 up $48 on the day.  This move can be largely attributed to the net spec and fund short position including options being the highest since 2012 which signifies a very hefty- short position.  As such, the move is not surprising because the market is short and thus traders are covering their shorts.  This doesn’t mean we have seen the end of the down move but simply traders on the wrong side and forced to covers shorts.  We also have entered earnings season and many companies are low balling their numbers so it might not take much to move to see the market continue higher especially if earnings are good.   Yesterday, Bank of America beat the street which added to an already short market.  Traders still need to focus on Treasuries where we saw the yield on the 10-year note get over 4% which if we stay around these levels cap the upside in the SP.

Disclaimer:

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.

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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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