by Danny Riley

This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.

And so it begins..

Follow @MrTopStep on Twitter and please share if you find our work valuable!

Our View

The golden age has begun. Today, the market needs to adjust the cash pricing in the equity markets, as futures ran for a while yesterday without any real cash market to keep them aligned, and a lot has changed since Friday. It is days like this that the MiM is handy to watch the opening auction since that is the first shot in finding today’s prices.

Much was said and done yesterday, so expecting there will be some price changes that the markets will have to absorb. Expect volatility.

No significant economic news is expected today; however, there are numerous auctions, and earnings announcements are picking up.

Our Lean

We are watching the opening auction develop along with the pre-market gap. Any large buys or sells can help evaluate the quality of the gap whether it will gap and go or gap and fade. Markets don’t like uncertainty, and there is plenty of it with tariffs scheduled to start on Feb. 1.

Our Lean: I am watching the gap and using it to gauge whether to buy dips or sell rips intraday today. Our multi-day bounce has played out. There should be a good two-way trade setting up as markets digest the new realities and uncertainties.

MiM and Daily Recap

The ES began its Globex session with its low of the day occurring within the first 15 minutes, printing 5968 and never returning to that level. By 8:00 a.m., it was consolidating in a tight range near 5995. However, from 6:00 a.m. to the regular session open, it was straight up short covering where it reached its pre-market high of 6035.50 with the regular session opening at 6026.75.

After the open,there was a little profit taking for about 15 minutes bringing the ES down to 6012.75 by 9:42 a.m., marking the low of the regular session. Some sideways and choppy trade for an hour or so to a false breakdown of the trendline, printing 6017.75 at 10:26 a.m. started the next leg of buying in the ES. This push sent the ES almost straight up to 6049 by 11:26 a.m.

From here it was time for some profit-taking again as the sellers took over and moved price back down to test the pre-market high where it held at 6035.75 just before noon. This essentially marked the trading range for the next three hours though we did manage one last upward probe to print our high of the day at 6051.50 at 1:22 p.m. After this high, the market reversed and made its way back to some sell stops at 6032.50 by 2:58 p.m.

The ES rallied back into the 6040 range before the MIM imbalance release at 3:50 p.m., which revealed 1.2 million to sell. This led to a decline into the cash close, with a settlement print of 6033.50. Post-market trading was sideways, closing at 6032.50 ahead of the MLK Jr./Inauguration Weekend.

The ES gained 63 points (+1.06%) on the day, while the NQ trade up 374.75 points (+1.77%) to close at 21,589. Volume was light, with the ES trading 1.32 million contracts and the NQ trading 580,000 contracts.

How to read the MIM

Technical Edge

Fair Values for January 21, 2025
- SP: 35.57
- NQ: 143.79
- Dow: 209.08

Daily Breadth Data 📊
- NYSE Breadth: 61% Upside Volume
- Nasdaq Breadth: 68% Upside Volume
- Total Breadth: 66% Upside Volume
- NYSE Advance/Decline: 62% Advances
- Nasdaq Advance/Decline: 63% Advances
- Total Advance/Decline: 63% Advances
- NYSE New Highs/New Lows: 96 / 12
- Nasdaq New Highs/New Lows: 100 / 80
- NYSE TRIN: 1.19
- Nasdaq TRIN: 0.82
Weekly Breadth Data 📈
- NYSE Breadth: 65% Upside Volume
- Nasdaq Breadth: 60% Upside Volume
- Total Breadth: 62% Upside Volume
- NYSE Advance/Decline: 83% Advances
- Nasdaq Advance/Decline: 66% Advances
- Total Advance/Decline: 72% Advances
- NYSE New Highs/New Lows: 138 / 285
- Nasdaq New Highs/New Lows: 218 / 483
- NYSE TRIN: 0.92
- Nasdaq TRIN: 1.49

Room Summaries

Polaris Trading Group Summary – Friday, January 17, 2025

Morning Session:

Key Resources Shared: David provided links to the daily trade strategy, range calculator, and room navigation tutorial, ensuring participants had all the tools needed to navigate the day effectively.
Market Sentiment: The session started with a positive outlook, dubbed “Gravy Day,” as David anticipated a bullish rally heading into the weekend.
Early Trades:
- NQ OPR Short Trigger: Noted as a potential short entry early in the session.
- CL OPR Narrow Range Stop Out: Highlighted as a quick exit due to tight conditions.
- David emphasized a long-side bias on dips, aligning with the bullish sentiment.

Midday Insights:

Technical Focus:
- Fulfillment of the D-Level Money Box Zone and reversal zones was highlighted. A screenshot shared helped visualize this movement for traders.
- David reiterated the concept of consolidation and expansion cycles, reminding traders of the recurring market dynamics.
External Factors: Mentioned the Supreme Court’s ruling potentially affecting TikTok, providing a macroeconomic backdrop.

Afternoon Session:

Strong Performance:
- A10 Indicator: Performed well during the afternoon.
- Cycle Day 1 Targets Achieved: Upper penetration targets for 6050 on both @ES and @NQ were fulfilled, showcasing a strong upward move.
- A screenshot shared mid-afternoon illustrated a “Super Cycle” unfolding, offering traders a clear view of market dynamics.
Market-on-Close (MOC): David pointed out a $1.2 billion sell imbalance but noted the bulls retained control, securing weekly gains.

Key Outcomes:

Both the @ES and @NQ met their upside targets, providing a profitable end to the trading week.
David’s strategic guidance on bullish dips and the cycle framework played out effectively, offering lessons on patience and sticking to the plan.

Lessons Learned:

Adherence to Cycles: Recognizing patterns of consolidation and expansion can lead to well-timed entries and exits.
Flexibility: Quick decision-making during tight ranges (e.g., CL trade) is critical to manage risk.
Use of Indicators: Leveraging tools like the D-Level Money Box and A10 indicator enhances precision in trade setups.

Closing Notes:

David ended the session on a positive note, expressing confidence in the week’s success and encouraging participants to recharge over the weekend.
Next trading day: Tuesday, following Monday’s holiday.

A solid day with fulfilled targets and valuable takeaways on market dynamics and execution!

Discovery Trading Group Room Preview – January 21, 2025

Morning Market Brief:

1. Presidential Inauguration Brings Volatility:
- Markets brace for volatility following the presidential inauguration.
- No tariffs yet, but a comment about potential 25% tariffs on Mexico and Canada by February 1 caused a sharp 60+ point drop in S&P 500 futures, reminiscent of volatility seen during Trump’s first term.
2. Executive Actions and Energy Focus:
- Trump issued a wave of executive orders, emphasizing energy production. A national emergency declaration aims to boost oil production, despite existing high capacity.
- Tech companies continue to invest in alternative energy sources like micro and nano nuclear reactors, moving away from oil.
3. Climate and Economic Policies:
- The U.S. exited the Paris Climate Accords again, dismissing climate change concerns despite increasing weather disasters. In 2024, there were 27 significant events totaling $2.9 trillion in damage since 1980.
- Trump’s inflation directive aims for price relief amid funding cuts, but its feasibility is uncertain.
4. TikTok Ban and Workforce Changes:
- A reprieve was issued for the TikTok ban, and 78 of Biden’s executive orders were rescinded. Trump also signed orders to centralize federal workforce control.
5. Corporate Earnings and Market Levels:
- Earnings before the bell: MMM, DHI, FITB, HDB, KEY, EDU, PLD, SCHW.
- Earnings after the bell: COF, IBKR, NFLX, STX.
- The economic calendar is quiet today.
6. Market Technicals:
- ES broke out of a short-term downtrend channel, signaling potential short-term bullishness if yesterday’s high (6078.25) is cleared.
- Key support levels: 5992/892, 5845/50, 5766/61. Key resistance levels: 6005/02, 6370/75.
- Whale traders show a bullish bias despite light overnight volume.
7. Volatility Outlook:
- Volatility declined Friday but is expected to remain elevated due to the holiday weekend and uncertainties from Trump’s first week.
Stay alert for sudden market moves and announcements that may drive further volatility.

ES – Week over Week

The bounce from the 13th is now complete. A move above 6082 changes our models to bullish and we will be more inclined to trade for higher prices. For the bear today to push back prints below 6023 could signal a move to lower prices around the 5950 level. We may need to move down to 5970 to make room for a run at new highs.

NQ – Week over Week

NQ is behind ES in consolidating for a bull run. The 22,032 level is our line for bullish resumption. For today, bulls need to consolidate their gains from Friday and hold above 21,533. For the bears, a push below 21,533 needs to move down to 21,248. Watch for pricing reaction to any prints at 21,840, if reached that could mark the high of the day.