Here's more analysis straight from the CME floor and Mr Top Step's Danny Riley

This will be a regular feature, which will come directly from him, once we've sorted out some IT kinks

What's going on with Wall Street?

I was having a conversation yesterday with a successful small town businessman when he asked how it is that crude oil is so highly correlated with the equity indexes right now. The question stemmed from a broader discussion concerning the recent behaviour on Wall Street as many people wonder what circumstance has possibly changed to produce this recent market decline. After all, to the prospective of much of Main Street, the economy has never fully recovered from the 2008 debacle and has been hanging by a thread while the major indexes continue to pound away at new highs for parts of three consecutive years.

Early last year as the stock markets began to sputter, it appeared that price action was beginning to change, and it's now telling that the S&P 500 last made a 52 week high back in May. In the early part of 2015 we began to mention the money flow departing from the equity markets, and that trend has continued now 10 months later.

S&P 500

Sure, crude oil is part of it. The energy sector is a vital one for the large caps, and with the price of oil so low, many of the companies are taking a hit, such as Chevron who reported their worst quarter in 13 years last week. We do realize that production has been exceeding demand, thus indicating that the economies around the world have seen some slowdown, most noticeably China.

There have been other factors to consider. Many of the economic indicators have been weaker over the last two quarters with projections suggesting that the slowdown is not out of the woods yet. I recall back in 2007 when analysts first mentioned the housing slowdown but suggested that it would never unwind so much to cause an economic meltdown. The point is that breaks in the damn only tend to grow.

Added to these concerns have been some slight political unrest around the world, and at home, with the United States facing a presidential election cycle this year with candidates too far to the right and left. This combined with another year of tiresome FED talk as projections of how many rate hikes will occur, or whether there will be additional stimulus.

Add all of this together with a S&P 500 that has quadrupled since the March 2009, and has exceeded the previous high by nearly 50%, equates to a tired market. The stats said the market didn't have to sell off after an initial rate hike. Thus far, that thesis is suspect, and the last time the Fed hiked rates was when the market was near all time highs. After that rate hike the bottom fell out leading to a greater than 50% drop.

Look, MrTopStep is not trying to promote fear or panic, but we must face the reality that what goes up must go down. While we have been bullish for several years now, mere responsibility suggests that we have to at least consider the other side of the coin.

We have respected traders we work with calling for lower prices such as 1500 on the index futures. We may or may not see that this year, however one thing seems certain, the personality of these markets have changed over the last year.

In Asia, 8 out of 11 markets closed higher (Shanghai Composite -0.52%), and in Europe 9 out of 12 markets are trading lower (DAX -0.72%). Today's economic calendar includes MBA Mortgage Applications, New Home Sales, EIA Petroleum Status Report, 2-Yr FRN Note Auction, 5-Yr Note Auction, FOMC Meeting Announcement and earnings from Biogen Idec Inc (BIIB), Boeing Co. (BA), General Dynamics Corp. (GD), Cliffs Natural Resources (CLF), Fiat Chrysler Automobile (FCAU), Anthem, Inc. (ANTM), Norfolk Southern Corp. (NSC), Tupperware Corp. (TUP), Textron, Inc. (TXT), St. Jude Medical, Inc. (STJ), Hess Corp. (HES), State Street Corp. (STT) and more...

Our View: The $1 billion to buy MOC pushed the ESH back up late in the day but Apple (AAPL) earnings rained on the party. That said the ES is trying to go higher but needs to get back above 1904.00 and hold to get to the PitBulls 1920 level. It's 6:00pm CT and the ESH that made a low at 1881.00 is trading 1885.25, down 10.75 handles from the 3:15 futures close. Our view, we are sticking to our guns that the S&P wants to go higher, but that doesn't mean it can't sell off further. We lean to buying the early weakness and selling rallies.

As always, please use protective buy and sell stops when trading futures and options.

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