Daily Digest 10/05/2022
Stocks turn it around to gain back most of their early losses. OPEC+ announces cuts to oil production. ADP figures show that 208k jobs were added last month.
Market Overview
After being down by as much as 1.8% in the morning, the S&P rallied in the afternoon. At one point, it was up before buyers ran out of steam near the close. All indices ended slightly negative. However, they recovered most of their early losses in what was a bullish sign. Three of eleven S&P sectors were green with energy XLE 0.00%↑ once again leading the way.
With oil prices falling the last few months, OPEC+ says that they will cut oil production by 2 million per day. This will almost certainly raise the price of oil and gas. On September 26th, crude oil futures closed at its lowest price since the beginning of the year. Since then, it’s risen 14.4% and been positive in 5 of the last 7 sessions in anticipation of today’s news.
According to ADP data released this morning, private companies added 208k jobs in September, more than anticipated. Salaries rose 7.8% Y/Y. This runs contrary to the Fed’s mission to tame inflation and could be signal that a Fed pivot isn’t happening any time soon. The BLS will release the non-farm payroll numbers on Friday in which job growth of 275k is anticipated.
Treasury yields were up following two straight days with losses. The 2-year gained 1.2%. The 5-year gained 2.83%. The 10-year gained 3.42%. There’s still inversions on various areas of the yield curve.
Here are some of today’s closing prices.
E-mini S&P 500 Top-Down Analysis
Below are the monthly (5-years), weekly (2-years) and daily (6-months) charts for ES.
M/M: ES is OTFD as it failed to take out the prior month’s high and has traded and closed below the prior month’s low.
W/W: ES has formed an outside week this week as price action has gone beyond both the high and low of the prior week.
D/D: ES failed to take out the prior day’s low so it’s still OTFU.
E-mini S&P 500 Metrics
Recent History and Performance
Technicals
E-mini S&P 500 Volume/Market Profile
ES Composite Volume Profile (5 days)
Here is a chart of the past five sessions with a composite ETH Volume Profile:
ES RTH Volume Profile (today)
Here is a chart of the past five sessions with a daily ETH/RTH split Volume Profile:
ES RTH Market Profile (today)
Here’s a TPO chart of today’s session with ETH/RTH split Market Profile:
ES Market/Volume Profile Levels
RTH Single Prints: n/a
RTH Excess: 3734 to 3737; 3814.25 to 3820
RTH Gap: n/a
Session Recap
Electronic Trading Hours (ETH)
Globex Session:
Wholesale was long at the prior day’s close. The ONO was inside of the prior day’s value area. Inventory during Globex was 100% short. ES only managed to rise above the prior day’s RTH close by 1-point. Supply slowly pushed the auction lower and underneath the prior day’s VAL. Sellers couldn’t push ES below the prior day’s LOD. Sellers began to lose momentum in the prior day’s lower excess range.
Range: 47.50
Regular Trading Hours (RTH)
US Session:
The RTH open was inside of the prior day’s price range but beneath its value area. It was also above the T+2 high. There was an initial inventory correction as ES rose at the opening bell. ES couldn’t quite get back into the prior day’s value area before supply absorbed demand at 3777.25. At the beginning of B period, supply slammed the bid and ES fell 30-handles. Supply took out the prior day’s lower excess range and got the auction beneath the ONL and prior day’s LOD. The fall began to stall in the prior day’s ON gap as resting bids helped stabilize ES. At 3734, supply shut off and shorts covered. From there, ES rose 65-handles off the low to get back into the prior day’s range and value area. At 3801, the buying stopped and couldn’t lift the offer. The auction fell nearly 20-handles as wholesale backfilled to find buyers. Supply shut off at 3782.25 as buyers appeared in the order flow again. Wholesalers brought their offers up higher to fill demand and ES took out the prior day’s high. ES hit 3820 before the buying faded and ES fell 30-handles. The auction ended a couple of points beneath 3800.
Range: 86.00