The S&P is doing exactly what it has been doing for the last eight years, making new highs. On October 8th 2007, the E-Mini S&P 500 futures made a new all time high at 1586.75, and along came the U.S credit crisis. The ES did not get back to its ‘high water mark’ until April 8, 2013, 5 years and 6 months later. Since taking out the old high, the S&P has made new all time highs in 27 of the last 48 months. If a new high is made this month, it will be 28 of the last 48 months that the S&P made a new high.
The S&P has had an astonishing 275% run since it’s 666 credit crisis lows. Since the Federal Reserve lowered interest rates to zero and implemented three separate quantitative easing programs, followed by “Operation Twist”, thus marking up $4.5 trillion in debt, it’s been ‘one new high after another’ in the U.S. equity markets. Whether you are a bull or a bear, there is no denying the overall price action… Make a new high, get the public to get short into an event, and then take back half or more of the decline in just a few days.
Yesterday was a big day of rips and dips, with the Trump tax cut headlines hitting the tape at 1pm cst. The ES traded to 2394.75 just after 10:30, up 9.75 handles, and then sold off down to 2386.25 just before 11:00. The ES then double topped at 2392.00, pulled back a little, and popped up to 2393.75. From there, the ES dropped back to where it previously held at 2389.25 before rallying back up to 2393.50, just 1 tick below the earlier high. After that, the futures sold off down to 2387.50, rallied back up to another lower high at 2392.25, and then sold off down to 2387.00 as more of Trumps tax plan hit the tape.
The ES opened the day on an uptick, trading up to the 2394.00 area, and then sold off into the close, settling at 2382.75, down 2.25 handles. In the end, it was a day filled with a lot of ups, and a lot of downs. In terms of the day’s overall volume, 1.49 million ESM17’s traded. In terms of the S&P’s overall tone, the future’s still seem to have room on the upside. We have seen this before; when the futures are close to a new high, they tend to sell off a little bit, and then creep back up.