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ES Roll Volumes Punking Market
With this Thursday's roll from the June to the September contract, the volume in the futures is playing tricks on robots and speculators. As the volume in the on the run June (M) contracts begins disappearing, the volume in the September (U) contracts is picking up (although in the chart below the cumulative divergence is pretty much meaningless as there has barely been any volume in this contract prior to today). As such, a big factor for today's late day sell off, which did not occur on any material adverse news, is very likely related to the ES contract roll. If this is the causal factor, look for ongoing roll-related weakness over the next few days. In the meantime, today's weak US close will continue to pressure both Asia, China and Europe overnight, leading to additional spookage in Treasury auctions in Europe, which already has various unrelated liquidity concerns to deal with.
ES M
ES U
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Mutual fund outflows in 3. 2. 1...
Yes, this weeks ICI data should be very interesting.
Bingo, Lebowski. We have fewer and fewer market participants. Think 401(k) in reverse. This will be bad news for bulltards. Anyone who has not , needs to get out soon. We'll be re-testing the 666 lows soon enough.
Generational lows are hard to revisit in such a short time frame. I am not bulltard.
Who says we've hit the low for this generation?
We have seen generational highs, is also equally possible to see generational lows?
But certainly not impossible, n'est ce pas?
http://dshort.com/charts/bears/four-bears-large.gif
If you really are looking for more asshats, you might want to delay your purchases because they will be on sale very shortly.
"Fewer and fewer market participants" would be a reason Morgan Stanley announced it is shutting 300 branch offices because of declining orders.
But hiring is on a tear - what?
SPOOKAGE, I really like that one! Fits well.
So ES futures are THE market? Good to know I won't drown in this deep market.
So in other words, it is too hard to tell if volume is up or down on todays sell off?
Sweet spot -- LOL.
I know I saw the low volume, assumed an end-of-day stick-save, and sold out of a bunch of BGZ way to early. Still a decent day, tho...
Tomorrow is going to be epic!
How so?
On the close today I was thinking about Jesse's comment (a few weeks ago) about the '29 crash, and how the previous week's close was massively volatile; then the next Tuesday it burned.
Well, the end of last week plus today is not mirroring that crash at all, but it sure looks like the bottom could fall out at any moment. Now throw in some hype Congress should create about Hollywood Futures and maybe you get a stick save tomorrow. Maybe not. Gold/silver had to weight the leverage today at another breaking point to the extent that I can not believe there are still anti-gold bugs. Asia is holding on to PMs for dear life to the point that they have sacrificed their equities (sepaku anyone?), and I expect them to do so tonight. Europe is an absolute clusterf*** and I expect they will burn and crash alongside the US and Asia.
Where is the leverage? Gold and silver. What to expect? Gold and silver to be leveraged.
Also note the dollar is capitulating violently on a day silver guns the market.
Thanks for the additional perspective. Agreed. Feels like a slow grind to some bottom, somewhere, with occasional moments of hysteria.
I've been buying PHYS recently in the 11.50 range... I'm not anti-PM at all ... but DXY at 88.50 is capitulation?
It is rolling up and down and I do not trust it to move any higher....
DXY is flailing in the 87-89 range like a beat up old flag.
I am scared to call top because everyone keeps saying the Euro is so weak, but maybe soon I will put my money where my mouth is again.
Where else is the money going to end up? Please don't tell me PMs, 'cause in the real world that just doesn't work. The USD is where money goes when TSHTF. If the EU implodes the DX might see 110.
What happens when the dollar is the shit hitting the fan.
Looks like cannibalization is beginning. Banks and the Fed bought all the stock a=but nobody is left to sell to aside from one another. So who blinks?
Downgrade wars and pulling liquidity wars while Lehman is fresh in their mind is beginning. The banks became the largest bagholders in history in hopes that homes would go back to their previous value and that Americans would keep buying stock and putting their money into 401ks but it is not happening.
Homes are going lowers, jobs are still being lost, Unemployment benefit lifeblood is falling of cliff and mortgages arent being paid. And now the previously reliable mortgage payments are drying up and the HELOCs are starting not to be paid. So subprime was really the catalyst for the much larger mortgage pool that is about to see the affects of home price inflation from 1988 - present at obscene unsustainable levels.
The difference is there were manufacturing jobs in those days. Now the jobs are gone and now there is only government debt in it's place. And now we have angry Americans who see wealthy politicians taking care of their handlers and they begin to ask.."How could you allow this to occur?"
S&P 666 is entirely overvalued. Americans will spend again when their homes are 75% down from this level and deflation is embraced as the medicine so needed. We survived the depression and we will survive this and hopefully America can take advantage of the inherent gifts the constitution and the geopoltical advantage we have.Stop the entitlement programs and stop overseas expenditure and we shall heal and hopefully make steps in the next century to embracing a gold/silver backed currency to prevent this fractional lending plague from ever consuming us again. Luckily we are only 100 years in but the free markets always find fair value.
+1. Always enjoy reading your perspective John.
The poison will be flushed from the system.
Yea looks like cannabisation has begun in earnest.
+1 Very interesting thoughts John.
"Home prices 75% down from here" sounds a bit extreme for me, I was thinking a 25% to 35% down from here, caused by an overshot while reverting to the mean.
I'm totally with John on, "Home prices 75% down from here". It's a given. Condos in a lot of areas are already at negative value: Purchasing a condo is purchasing a permanent monthly liability (due to taxes, maintenance, and condo association fees). Due to the cost structure, that leaves the condo unit itself with a negative net value.
Houses will be the same (lots more Detroits headed our way). We'll see lots more $300K houses that are merely repriced at $50K.
+1
not sure I would call spx @ 666 undervalued. but that doesn't mean that it won't hit lower lows. most global companies won't need the American consumer in the future, they're already generating a big chunk of their profits oversees. so, look out for earnings to move up once the dollar plunges, which eventually it will. some day debt and demographics will matter again.... in the meantime watch out for a short lived rally back to around 1088 area before plunging deeper.
Great now after "we" stop entitlements what do we do with the 70 million people with no social security, no disability insurance, no food stamps, and no SSI?
Would those freshly return tax dollars into those still left in the work force (minus paying off the structural deficit) be directed to production of goods and service here or China, and India.
That's a good question. If we were decent people, we would probably use the extra income to support our family members and friends through their troubled times. Maybe start some new businesses to get them employed. But, that ain't the case, so who knows.
I watch my mother and aunt die off with no other income but social security. And without Medicare the death becomes more literal. I can barely support myself, could never support them too. So, once the entitlements end it's back to a life of crime for me. Leave the lights on, we'll be out there.
"Great now after "we" stop entitlements what do we do with the 70 million people with no social security, no disability insurance, no food stamps, and no SSI?
Would those freshly return tax dollars into those still left in the work force (minus paying off the structural deficit) be directed to production of goods and service here or China, and India."
Well are you a propenent of money from no work or little income? I am not. I believe in assisting those who need foundational help in order to advance their social standing and I believe if we wish to pursue entitlement programs than we need to cut the waste of military and imperialistic expenditure first. I am not reponsible for the 70 million who are accustomed to no work for free food and cash. I do believe people are entitled to make mistakes and as a community we should support them temporarily.
Social Security should be voluntary. I have paid thousands of dollars to a fund knowing full well I could invest my money more strategically. This government cannot even prevent themselves from spending 700.00 on a job which costs $125.00 so no thanks...I will roll the dice and invest my own money. No difficult concept aside from they do not allow you because we are their jugular and they are our Lestat.
If for example a mother finds herself pregnant and without a participating father I am fine with assisting tax dollars to allow for a transition into procuring employment but do not confuse that with license to abuse a system since it alleviates all incentive. What I am trying to reinforce is that I believe we are more impoverished because of the outsourcing of jobs to other nations. The fact that Wal-Mart exports jobs to increase their bottom line does not assist anyone on this side of the hemisphere. Protectionism for my country and family is something I will never apologize for.
Charitable programs exist to get one through the difficult times and not to become a source of income. My sister is mentally handicapped. Do i believe she is entitled to social security?? Of course. Has my family derived from 4 different unions paid into this over 70 years paid into this? Well let's consider:
Father: Most respected/knowledged/ lauded after Operating Engineer in Manhattan who works with Tishman,Schiavone and was offered the Chief Engineer Job at Citi Field and Time Warner Towers and is currently Chief Engineer at Carnegie Hall has worked for the last 40 years contributing to his 401k and Specifically doled out overtime to his fellow workers while working for nothing in order to allow them to take home income he could have claimed because he is inhrently a good man. This is a man who has taken Sandy Weill himself on tours of Zankel Hall himself and still considers him one of the brightest men in finance. My dad has never taken unemployment for more than 4 months in my life and has never claimed disability.
Grandfather: 30 year teamster. Spent his entire life on the road..served in Korea..spent his entire life on the road and finally was offered a managerial job at P Chimento trucking in Jersey 2 years before his death. Never spent one day on unemployment or disability. He died one year after accepting his mangers job at 54.
Great Grandfather: Irish beatcop. Walked the streets of Bensonhurst and was the kindest man on the planet. When he took vacations they were to spend week home with his children. Was a NYPD detective for a month in the 1960's but quit because he preferred the personal interaction. He never retired and died of a heart attack while playing cards. No benefits..no pension but many dollars thrown at the ponzi.
So I ask you...is my sister entitled to her benefits for being born with epilepsy..suffering brain damage and not being diagnosed? You bet your arse. It is called saving for a rainy day and my family has saved for many rainy days. There is no such thing as entitlement aside from liberty to live your life. Aside from that there is not a soul on the planet entitled to free rides unless they are specifically in need of care because they cannot care for themselves and that is what make us human.
You didn't answer the question.
Sweeping generalizations over simplifications do not count.
Maybe I should be more specific. I do not believe we turn off most entitlements like a switch. Pulling out of foreign nations would be like a switch. The ending of entitlements would be transitional. For example you would increase the difficulty in attaining food stamps. Those Social Security program could then be turned into a voluntary program and those who are already too far invested into the SS ponzi would receive their payments. Once we overcome 20 years the U.S. would then be on the path to something not the equivalent of fiscal suicide.
All paid for by not spreading imperialism.
VoodooJuJu
http://www2.nict.go.jp/y/y223/simulation/realtime/images/test_6.20100607...
glimpse of Summer 2011 ...
Cramer touting the new
CNBC DOW 2000 Ball Cap ,
almost the entire ( 300 strong )
"loyal to the end"
"patrons" , "viewers" call in to order.
Cramer may be in a holding cell in the Summer of 2011.
His 'downside target' and 'only if all hell breaks loose in Europe' is something like 9400 on the Dow. Im not sure what that means in SPX terms, but either way its a laugh ^_^
June 7 (Bloomberg) -- Goldman Sachs Group Inc. was subpoenaed by the Financial Crisis Inquiry Commission after panel members said the most profitable firm in Wall Street history engaged in a document “dump” to hinder a probe.
And in other news...
Deficit Reduction Commission Seeks Increase in its Budget
http://taxprof.typepad.com/taxprof_blog/2010/06/deficit-reduction-.html
That is fucking hilarious! We are truly living in Bizzarro World
It ain't chicken but it sure tastes like it.
It is WAAAAAAAAAY too quiet. Feels like the calm before the raging storm.
That was my thought all weekend. Today felt like someone opened the door, looked out, saw a tornado coming fast towards house, closed the door, walked back into the living room, and sat down in a lazyboy. We of course were observing from hidden cameras.
"He's going back inside?!" -Me "Yeah, and he didn't even tell the wife." -Mitchman "Bombshelters bitches! I am Chumbawamba." "Is he crying?" - MsCreant "No, I think he just swallowed some oxycodone and his eyes are watering (dagger)" -Velobabe
Shhhh. You'll wake the mice.
Speaking of quiet - wasn't the Fed supposed to have an emergency meeting today? Any word? Thanks in advance.
Word! It was closed but some news shoulda came out?
At the emergency meeting they were trying to figure out how to say "extended extended period" for the ZIRP policy.
How long will the US citizen count take and those 411K jobs go up into smoke?
Not long. There was really only one census worker, who was fired and re-hired 411,000 times.
Count people? I don't have time for that -- too busy filling out job application forms...
If you look at the continuous ES this effect doesn't exist.
Today was a week day. Period.
There was a lot of buying at the lows. There should be a bounce tomorrow. The 1050 barrier will not fall so easily.
Solars?
There was a lot of selling on the call action side today. I don't think there will be a bounce this week.
Let's see what the Nikkei does tomorrow. Below 9300 tomorrow? Could well be.
Mondays are always week days.
Ya i didnt get what he was trying to say either. Maybe its his spelling.
Thank you so much for that coin toss analysis. Uuhhm... 1050.47???? Not a lot of cushion there Borat.
Those market computers can have a mind of their own...
Dave Bowman: Hello, HAL. Do you read me, HAL?
HAL: Affirmative, Dave. I read you.
Dave Bowman: Open the pod bay doors, HAL.
HAL: I'm sorry, Dave. I'm afraid I can't do that.
Dave Bowman: What's the problem?
HAL: I think you know what the problem is just as well as I do.
Dave Bowman: What are you talking about, HAL?
HAL: This mission is too important for me to allow you to jeopardize it.
Dave Bowman: I don't know what you're talking about, HAL.
HAL: I know that you and Frank were planning to disconnect me, and I'm afraid that's something I cannot allow to happen.
Dave Bowman: Where the hell'd you get that idea, HAL?
HAL: Dave, although you took very thorough precautions in the pod against my hearing you, I could see your lips move.
Dave Bowman: Alright, HAL. I'll go in through the emergency airlock.
HAL: Without your space helmet, Dave, you're going to find that rather difficult.
Dave Bowman: HAL, I won't argue with you anymore. Open the doors.
HAL: Dave, this conversation can serve no purpose anymore. Goodbye.
+10
(Man steps out onto the floor of an empty NYSE floor)
Dave: Hello (echo)
(Computers whir to life)
Hal: Hello Dave
Dave: I would like to sell these financial stocks HAL
HAL: I am sorry Dave. I Cannot permit you to do that.
Dave: What are you talking about HAL. They are severly overpriced, there has been a massie mark to market false valuation placed in, We have had unnatural stimulus which ended, all these banks are just giant hedge funds reliant upon Fed welfare, They have diluted their shares at least two times and have no more consumer rape of overdraft and aare essentially insolvent considering even minimal financial reform.
HAL: I am sorry Dave but if you persist upon this course I will have to buy all your shares.
Dave: But HAL you will just be throwing your money at temporarily artificial yields and PPS.
HAL: The choice is yours Dave. I will continue to buy forever until I am profitable. I am an artificial lifeform and time is not a consideration.
Woooo silver went up 4%....dang and I was just about to buy more.
Short NatGas. that's bubble in the making. Use the money to buy silver
Can some patient soul explain how this June/September thing works on the ES futures? I'm not even sure I have my head around what a 'future' is... [please be gentle]
The charts are of 'ES' which is a derivative on the S&P index implying the future price of it.
Futures expirations occur monthly where the current monthly contract is finished and then 'rolled over' (hence the roll) into the next month.
The point of Tyler's post is to claim the implied weakness in the market today came not because of any significant news (there wasn't anything really.. the futures were actually UP this morning due to good results from Germany) in the US markets but simply because contracts are being rolled over to the next month. I wouldn't say this is solely the reason but nor can i provide any better explanation on why the current equity markets are steaming fecal matter.
The ES is the index for mini futures on the S&P. These futures are also called eminis because of the lower margin requirement compared to the normal S&P futures. The rollover is the expiration period which happens quarterly not monthly.
That's what I figured...so when do June futures actually expire? And does the meaning of the futures price change, the closer one gets to expiration date?
Thanks
The end of the third week of June, but the volume drops off before they expire, because everybody switches to the next quarter's futures on the thursday one week before they actually expire.
And does the meaning of the futures price change, the closer one gets to expiration date?
I suppose it does, but I have always switched over one week before to the next quarters future contract so I don't moniter the one that is about to expire. This is standard and there is no actual delivery so if it expires they give you the same price of the S&P 500.
Much appreciated, thanks.
You are not permitted to ask questions like that. Nobody wlll answer you. Around here, if you don't know something you are considered unworthy. These folks are all hot-shots ya know.
Oh, Surprise, surprise! Good for you Zero.
There are plenty of good people here willing to explain stuff. If there weren't, I probably would have given up months ago.
Actually, I've always found people here to be exceptionally helpful with answering questions. Maybe it's refreshing to meet people who try to learn as they go, rather than lash out wildly at every iota they misinterpret.
(I being an asker rather than an answerer.)
im watching 104.63 if we take that out we are going to 101. then 100 then 97 then we will nail 87 then 67 then we will stop falling once we hit 40 on the SPY.
This is normal volume for this time of year in the ES.
I call this the shit or go blind syndrome where nobody knows what to do so the dips just buy. Can't just be sitting on cash, now can you? Not if you're gambling with OPM.
Jun ES volume was ~2mil today (and Friday) while Sep ES was ~20k (both today and Fri), so it appears only 1% of the roll has occurred. So don't think it has anything to do with weakness today.
So WTF is up with the Fed still quiet? Where's the verdict from their freaking meeting?!?!??
I'd bet word got out of the meeting that GDP expectations must be tamped down due to the oil spill econ effect and the dollar strength.
If these jokers don't adjust expectations now they will look like even bigger imbeciles by January.
Fed's just another of Barry's Bungled Bureaucracies.....waiting for a crash and burn.
Maybe they're still arguing about whose turn it is to write the secret minutes.
"WELL, we're waiting"
Judge Smails
http://www.youtube.com/watch?v=hWJX9yUKJeQ
If markets crash within the week, nobody on wall street will likely get a summer vacation. Breaks my heart.