The S&P 500 futures rallied right off the open yesterday. The early high came in at 2168.00 and then sold off slightly. As day two of the Federal Reserve meeting approaches there are only two things we know for sure. The first is that the S&P is not pulling back much, and the second is the total lack of volume.

Its 2:35 CT and the ESU16 has been trading in a narrow range all day. After a few sell off attempts and a few higher lows the MiM (MrTopStep Imbalance Meter) is showing over $250 million to buy. The mutual funds have been putting money back to work in the stock market for the last several weeks and there seems to be no shortage of buyers. At 2:45 CT the NYSE stock imbalance showed MOC BUY $ 620 million, that’s nearly $3 billion to buy in the last three trading days. The guys with the ‘better seats’ win again.

_{Nasdaq chart}

_{Bond chart}

At the end of the second quarter the big investment banks and mutual funds quarterly rebalance was to buy stocks and selling bonds. There has not been much let up in either market, but as the last trading day of July approaches, MrTopStep thinks there could be a reverse of the what we saw at the end of June. We will be looking for a possible ‘walk away’ and a month end rebalance of buying bonds and selling stocks.

Yesterday, the S&P 500 followed similar price action from Monday. While the ESU did rally on the open, trading up to 2168, it seemed the bottom fell out mid morning and the index futures dropped to 2154 which was a huge move for the recent week’s price action. John Monaco, a NYSE floor broker in the IMPRO, came on the chat telling us that the chatter was that the drop was due to a very large sized sell program in stocks on thinner liquidity and that was responsible for the push lower.

We could note that corresponding markets were not showing risk off and the ESU began to hold a small bid midday trading back up to the 2161.50 open and then to the weekly pivot at the 2163.50 area that William Blount in the room has been pointing out as the price of the week.

Overnight, global equity markets continued their bid on top of central bank optimism from the Fed and Bank of Japan. While most of the Asian and European markets maintained a rally, the S&P 500 futures (ESU6:CME) traded in another tight range between 2163.75 and 2169.25 and is currently trading at 2167.00 up a handle on globex volume of 115K at 5:45 am cst. Right now in the S&P futures it’s the same song, as the PitBull calls it “water in the bathtub” price is slashing from one side to another, back and forth and this tub is small. 2155-2160 is demand and 2165-2170 is supply.