CPI report lived up to the hype! MAJOR volatility in speed and magnitude of the move!
The Mini SP 500, one of the most liquid markets in the world, sold off over 100 points in less than 1 minute!!
Traders “pulling out the bids” ahead of the report as well as the fast move caused many stop orders to get rejected!!
How can that be?
When impactful economic reports are released, we expect large , violent price swings. which may leave your open positions unprotected , even with stop orders. What creates the volatility? people cancel their bids and offers making for large orders, that would easily be absorbed by the market during normal conditions moving the market precipitously in either direction. As a result, the exchange wants a “balanced order book and created a Price band within which reasonable orders will be maintained, but if the market moves outside the band within seconds those orders are cancelled and not longer working, just like a stop with a limit would function.
We will expand on this topic in depth on tomorrows blog.
PPI tomorrow….Today was one of the highest volume days in recent month for stock index futures.
Below a 10 second chart of the ES from today! Click image to enlarge. A move of almost $6,000 in 45 seconds!
Stock Index futures are entering the “rollover period”.
December is now the front month/ higher volume.
September will expire this coming Friday at 8:30 Am Central time.
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09-14-2022
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