[OFFICIAL] S&P 500 Market Watch

[aurvandil]

Are you analysing the options on SP500? Including 0dte? If not you're missing out a big part of the market.

Thanks. I look at ES option chains across multiple expiry, including 0 dte. I am active mainly in the 45 dte to 21 dte.

 

[aurvandil]

10 May 24

Market has broken substantively above 5220. The way to a fresh ATH is now open. Options are pricing a potential breach by key 17 May expiry if market goes above 5260. The break of the 5220 was well supported with 10 out of the 11 sectors of the S&P registering gains.

The CPI on 15 May remains the key event risk. The narrative now is that the FED has pivoted. While previously they had only looked at inflation, they are now looking at both inflation and unemployment. Yesterday's higher than expected unemployment claims is tha latest data point to show that the US economy is finally starting to slow. Market is now pricing that the FED might pre-emptively cut in the face of sticky inflation to ensure that the economy does not fall into a recession. Expectations now is that we will get a cut in Sep and a 50-50 chance of a 2nd cut in Dec.

 

[aurvandil]

13 May 24

Market reopened largely unchanged from Friday's settlement. Despite CPI being just 2 days away, market continues to cling onto the higher prices with VIX falling below 13.00. In situations like this, a good friend of mine likes to quote the following trading wisdom: when what is supposed to happen, DOESN'T.

Market is behaving the way it is not because of stupid,ill-informed market participants. It is doing so because there are market particpants out there who know something that we do not. The US market is well regulated but it is not perfect. It is perfectly possible that there are insiders who already know what the CPI is and are front running the number. Given the price action, I am leaning towards a weakish CPI print that supports the FED cutting once in Sep and a 50-50 chance of a cut in Dec.

 

[aurvandil]

14 May 24

Market had a quiet inside day within the range established on Friday. VIX is up substantailly, suggesting that we are finally seeing order flow hedging the upcoming CPI number.

Expectation for today is for the market to show weakenss and fall towards the 5200 heading into CPI. Key level below is the 5230. This has been tested twice unsucessfully. It would be a bullish signal if market fails to break the 5230 and the VIX continues to rise.

The key level above is 5265. This has been tested unsucessfully three times. It will be totally unexpected if market breaks this level before CPI. If this happens, it would indicate that there really is something not in the public domain that selected market participants are pricing in.

 

[aurvandil]

15 May 24

Market broke out of the range pushed above 5265. The ATH of 5333.50 is now well within range.

Earlier in the day, there was a spike down on hotter than expected PPI numbers. This was however quickly taken back when it was revealed that the spike was due to revisions from the previous month's data. Correcting for this, PPI came in pretty much as expected. Powell spoke yesterday and his remarks were similar to what he had said at the FOMC press conference. This marked the second time that he reassured markets that rate hikes are not on the table.

The market push up was well supported with VIX coming in and 9 out of the 11 sectors that make up the S&P registering increases. The move up started mostly after Europe close when volume typically starts to thin. On market close, there was a huge volume spike from MoC orders. This is significant as this was the last chance for anyone who has size to get anything done before CPI. Market ended the session on heavy volume, accepting prices above 5265.

We now head into CPI. FED is forecasting headline inflation at 3.5%. Market is expecting it to come in at 3.4%. Given the way we closed, we should get a continued push up if we come in at 3.4% or lower. Nvidia is up next and given recent Mag 7 earnings call, there is a good chance for Nvidia to beat even the extremely high expectations analysts have set.

 

[aurvandil]

16 May 24

Hope everyone was on the correct side of the CPI print.

Market has pushed to the ATH and looks set to breach by end of week. The first 100 pts after a retracement breach are always easy and we should break above 5400 relatively quickly.

The CPI print was in line with market expectations which was lower than what the FED was forecasting. Market now expects 1 cut in Sep and 1 cut in Dec.

Nvidia earnings are up next. We are in the cap ex phase of the AI story. They should do very well.

 

[aurvandil]

Friday 17 May 24

Market made a new ATH before pulling back. Of note is that the new ATH was made during the RTH session after market open. The bulk of the move down was caused by a flood of sell orders starting at 1:25 am and a second wave of sell orders on market close. Auction appears truncated by market close and we might see further weakness as people close book for the weekend. Today is also expiry of the most popular ES options date market participants were using to hedge the ES futures going into CPI. Other than weakness, expectations is also for plenty of chop. Best case is for a nice clear excess low which allows identification of a clear bottom ahead of next week's Nividia earnings.

 

[aurvandil]

Monday 20 May 24

The market reopened slightly higher today, reclaiming its pre-retracement ATH of 5333.50. As anticipated, Friday's trading was choppy, with traders closing their books ahead of the weekend. A key point of interest is the market's test of the 5307.75 halfback level. The swift and sharp rejection at this level suggests a solid short-term bottom, setting the stage for a potential rally to fresh all-time highs.

Underlying market strength remains robust, with 9 out of the 11 sectors that make up the S&P showing gains. This broad-based sectoral support underscores the market's resilience and bullish sentiment. VIX has come in and closed Friday below 12.00.

Looking ahead, all eyes are on Nvidia's upcoming earnings report. Expectations are high, and a positive earnings surprise could propel the market above the 5400 mark by the end of the week.

 

[Nofear40]

Hello all experts, what will be a good fund to invest SRS in S&P 500? I understand that S27’s liquidity may be a concern

 

[aurvandil]

Hello all experts, what will be a good fund to invest SRS in S&P 500? I understand that S27’s liquidity may be a concern

Assuming you are not trading CPSX would probably be what you are looking for,
You can buy it cheaply via IBKR.

 

[reddevil0728]

Hello all experts, what will be a good fund to invest SRS in S&P 500? I understand that S27’s liquidity may be a concern

Invest meaning long term right. If that’s the case liquidity not too big of a concern?

Assuming you are not trading CPSX would probably be what you are looking for,
You can buy it cheaply via IBKR.

But poster asking for SRS.

 

[aurvandil]

Invest meaning long term right. If that’s the case liquidity not too big of a concern?

But poster asking for SRS.

If SRS then can only play S27 and get makan by market maker.

 

[reddevil0728]

If SRS then can only play S27 and get makan by market maker.

I think it’s always a case about whether there is other better alternatives. If there isn’t, then this is the best.

 

[aurvandil]

I think it’s always a case about whether there is other better alternatives. If there isn’t, then this is the best.

Instead of topping up the SRS, you can always use cash and buy CSPX.

I always found this to be a better alternative that putting into SRS and being limited to S27.

You lose the tax benefit but have better investment options and are not locked in by the SRS withdrawal penalties. You never know when life happens and you suddenly need the money.

 

[reddevil0728]

Instead of topping up the SRS, you can always use cash and buy CSPX.

I always found this to be a better alternative that putting into SRS and being limited to S27.

You lose the tax benefit but have better investment options and are not locked in by the SRS withdrawal penalties. You never know when life happens and you suddenly need the money.

Yes for those amount not already in SRS.

However, some people are adamant about saving tax for the sake of saving tax without considering the consequences.

 

[aurvandil]

Tuesday 21 May 24

In a quiet session, the market saw a failed push to test the ATH of 5349, followed by an unsuccessful attempt to move lower, ultimately ending around the pre-retracement ATH of 5330. Expectations are for the market to continue consolidating around 5330 as it anticipates Nvidia's earnings. Following Nvidia's report, the FOMC minutes, set to be released on Thursday, could be a significant market mover. While the minutes do not release any new information, the Fed often uses them to provide guidance by highlighting selected aspects of the meeting, steering the market in the desired direction. With Memorial Day on Monday, active trading is expected towards the end of the week as traders prepare for the long weekend, likely quieting down after the European markets close on Friday.

 

[RedsYWNA]

Yes for those amount not already in SRS.

However, some people are adamant about saving tax for the sake of saving tax without considering the consequences.

Using SRS to buy S&P 500 can generate substantial savings for high income groups, that overwhelms the higher trading costs

 

[reddevil0728]

Using SRS to buy S&P 500 can generate substantial savings for high income groups, that overwhelms the higher trading costs

That’s not saving tax for the sake of saving already.

 

[aurvandil]

Using SRS to buy S&P 500 can generate substantial savings for high income groups, that overwhelms the higher trading costs

If you are high income, the amount you can put into SRS annually is quite small. A better approach would be to put into SRS and buy SG govt bonds. The tax savings added to the interest gives a decent return.

For S&P 500 investments, you use non SRS cash savings to buy into a liquid instrument like the CSPX. If you are buying into the S&P 500, a key consideration beyond liqudity is that the instrument must be available for trading during US hours.

 

[reddevil0728]

If you are high income, the amount you can put into SRS annually is quite small. A better approach would be to put into SRS and buy SG govt bonds. The tax savings added to the interest gives a decent return.

For S&P 500 investments, you use non SRS cash savings to buy into a liquid instrument like the CSPX. If you are buying into the S&P 500, a key consideration beyond liqudity is that the instrument must be available for trading during US hours.

If you are investing n not trading then it should be ok with low volume