..holding on

If you don’t trade the overnight ES and/or got to your trading platform 30minutes late today, you pretty well missed the entire US equity reaction to the global liquidation of risk.  There was absolutely nothing going on after 10am as fear took a breather.  The fact there was no more weakness trumps the fact dip buyers didn’t appear.  The US market open/close should be no different  vs. all the other global markets off geopolitical tensions.  The absence of dip buyers is quite logical and thus not disappointing.   Also, despite a 1.4%SPX drop,  the underlying tape (Shadowlist) had about 40 equities between gains and losses less than <2% suggesting no aggressive selling and just a lack of buyers.  Considering the high beta nature of the list from momentum to commodity names,  it’s even more of an outperformance and evidence of longs holding and/or ‘stock picking’, despite all the market negative noise.

Liquidity will diminish more tomorrow making a snapback less likely, but the market will have eco data that could pressure the USD allowing for some upside, plus a historically positive biased day ahead.

Happy and safe holidays!