JPMorgan’s Dimon Speaks, but Will Anyone Listen?
The markets have a strange feel to them
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Our View
It’s hard to see through the forest with volumes being so low and amid all the rips and dips.
All day long it was one false start after another. I could be wrong, but as much as I like buying the dips, the markets have a strange feel to them…like they have a dark cloud hanging over them.
On Monday I pointed out everything I could about why the markets are not acting right, but JPMorgan Chase CEO Jamie Dimon warned on Monday that persistent inflationary pressures driven by fiscal deficits and military conflict among — other factors — may lead to U.S. interest rates of 8% or even more.
If you haven’t read Dimon’s letter to shareholders, here is the link to the JP Morgan Chase 2023 Annual Report.
No one promised us a rose garden, but right now that would be OK!
Our Lean
There is only one economic report this morning — the NFIB optimism index — and no Fed speak.
That only leaves the headlines and BOTs to play with. My guess is we see another day of narrow chop and some repositioning in front of Wednesday’s CPI number and the Fed Minutes. I think the dark clouds over the markets right now are the timing of Iranian retaliatory strikes.
Our Lean: If the ES opens lower, it is very likely that it bounces. If the ES gaps higher, I want to sell the open or the first rally above. After that, my gut says sell any 15 to 25-point rallies.
If either trade works, it’s best to take half off and try to hold or trail a stop. When the volumes are so low there are usually some small ups and downs, then the futures go dead and in comes the back-and-fill.
When I look at yesterday’s daily chart I see an initial move up and down and then I see one major back-and-fill pattern from 12:47 to 3:30 (from the 5252.35 level to the 5261.75 level). Yesterday, I made the big mistake of trading into that.
To conclude, I think there is a lot of negative risk potential. The question is, will the ES take bad news and make good of it? I will say one thing, it’s all air under 5236.00.
MrTopStep Levels:
How to use MTS levels
MiM and Daily Recap
ES Recap
The ES traded down to 5236.50 and then rallied up to 5266.75 on Globex and opened Monday’s regular session at 5258.50. After the open, the ES traded 5260.25, sold off down to 5246.50 at 9:41, rallied up to 5257.50 and then sold off down to a higher low at 5248.50 at 10:08 and then did a sideways-to-up back-and-fill for the next 15 minutes and then rallied up to 5268.75 at 10:57.
After the high, the ES pulled back to 5260.00, rallied up to a lower high at 5267.25. sold off down to 5252.25 at 11:36 and then did a slow grind down to 5245.25 at 12:33. From there, it rallied up to 5261.50 at 1:05 and then pulled back to 525.25 at 1:52. After the pullback, the ES rallied to a 5261.75 double top at 2:21 sold off down to 5253.50 at 2:48, back-and-filled just above and below the VWAP, popped up to 5264.25 at 3:35 and then sold off down to 5251.50 and traded 5255.50 as the 3:50 cash imbalance showed $774 million to sell. The ES dipped to 5260.50 at 3:59 and traded 5252.00 on the 4:00 cash close. After 4:00, the ES rallied up to 5258.25 and settled at 5257 on the 5:00 futures close.
In the end, the ES and NQ acted skittish. In terms of the ES’s overall tone, the ES was unable to hold the rallies. In terms of the ES’s overall trade, volume was on the lower side: 242k traded on Globex and 878k traded on the day session for a total of 1.120 million contracts traded.
Technical Edge
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NYSE Breadth: 60% Upside Volume
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Nasdaq Breadth: 54% Upside Volume
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Advance/Decline: 60% Advance
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VIX: ~15.25
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(down 10% from Thursday’s high)
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ES Daily (Levels in Our Lean)
Guest Post
Guest Post
Anchoring the Volume Profile to the previous BOC Rate Statement of the Canadian Dollar futures or 6C. We have traversed wide enough to create a nearly perfect balanced profile leaving us with an environment great for scalping.
!. Having spent most of march attempting to expand higher from the statement and report held on March 6th left us with a large selling tail giving clear signs of rejection towards higher prices.
Through the month of March and last weeks start of April has a clear Low Volume area drawn sandwiched between the Value Area High and the POC and the first area to garner some filling should the report on Wednesday spark a battle between both sides of sellers intending to defend their positions against fresh responsive buyers.
Aiding the expectations for building out this balanced profile ,comes into view of the most recent spike below showing some responsive participation by buyers to keep prices from falling lower from the end of the previous week, helped along by an expectation for rate cuts to occur in July.
Economic Calendar
For a more complete Economic Calendar see: https://mrtopstep.com/economic-calendar/
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!
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