Do Not Forget This: There Are 3 Parts to the Trading Day
Here’s what they are.
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Our View
Clearly my rule about the three parts to the trading day were front and center on Monday. As a refresher (with yesterday’s action in parenthesis):
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What happens on Globex (rally)
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What happens after the 9:30 open (selloff)
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What happens in the last hour (the hour of power, straight up).
But that’s not all. The ES held perfectly at the 5256.50 50% retracement from Friday’s range and last but not least, the funds put money to work on the last trading day of May and clearly, on the first trading day of June too.
Our Lean
The ES and NQ are in a very choppy zone. I think we see higher prices, but the ES is having a problem holding above 5300. It seems like the futures have to go down to go back up — like they have to get shorts in the mix before going back up in the final hour.
As mentioned above, there are three parts to the trading day: What happens on Globex, what happens after the 9:30 open and what happens in the final hour — and that’s how it’s gone for the last sessions.
Our Lean: It’s a two-way street. You can’t get short after the ES goes down and you can’t be long above 5300. I remain slightly positive, but I can’t rule out another selloff either. 5250 must hold as support and on the upside, the ES has to get above 5306 on a closing bais to continue going up.
MrTopStep Levels:
MiM and Daily Recap
ES recap
The ES traded up to 5313.25 and opened Monday’s regular sessions at 5312.25. After the open, the ES sold off down to 5306.00, rallied up to 5312.25 at 10:00, sold off down to 5300.50, rallied up to a lower high at 5303.75 and then traded down to 5281.00 at 11:09. From there, the ES up-ticked to another lower high at 5285.00, then dropped down to a new low at 5260.25 at 1:00, up-ticked and then dropped down to the low at 5246.75 at 1:30.
After the low, ES rallied up to 5279.00 at 2:30, pulled back to 5272.00 at 2:20, pulled back to 5267.50 and rallied up to 5282.50 at 2:45. From there, it pulled back to 5274.00 and rallied up to 5286.75 at 3:22 and then traded down to 5278.00 at 3:40 and then popped back up to 5286.00 at 3:49. The ES traded 5284.50 as the 3:50 cash imbalance showed $590 million to buy and then popped up into the buys stops. That’s when I wrote the following in the Mr. Top Step chat:
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IMPRO: Dboy (3:53:32 PM): gets above there, I think 5291-93
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IMPRO: Dboy (3:53:55 PM): has to be stops above
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IMPRO: Dboy (3:54:38 PM): late day gamma buys
The ES ran the stops above 5286.00 up to 5301.00 at 3:59 and traded 5299.25 on the 4:00 cash close. After 4:00, the ES traded up to 5303.25 at 4:19 and settled at 5300.50 on the 5:00 futures close, up 5 points or +0.09%. The NQ settled at 18,662.25, up 71.25, led by Nvidia, which rose 4.9% to close at $1,150 or +4.9%. Despite an OPEC+ agreement on Sunday to extend production cuts to boost prices, crude oil futures fell 3.6% to settle at $74.22 a barrel. The 10-year yield edged lower to settle at 4.401%, its third straight session of declines.
In the end, both the ES and NQ gapped higher and sold off with the ES falling just a few ticks off the 50% retracement from Friday low to high at ~5256.00. In terms of the ES’s overall tone, it was wobbly. In terms of the ES’s overall trade, volume was lower: 230k traded on Globex and 1.508 million traded on the day session for a total of 1.738 million contracts traded.
Technical Edge
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NYSE Breadth: 46% Upside Volume
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Nasdaq Breadth: 63% Upside Volume
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Advance/Decline: 46% Advance
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VIX: ~13.75
Guest Post — Neils from Tradrr
Taking a glance into what will be the first trading week of June we can gauge ourselves generally being within a potentially 4 weeks of balance.
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Setting the all time highs on May 23rd in the Globex session left us with an excess of prices for the screened set of weeks and will become an area for sellers to defend excess between the all time high at 5368.25 (set in globex) alongside the set RTH high at 5358.25
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On the Bullish end of the Balance spectrum we found rejection of lower prices on May 14th as it attempted to break its noticeable high volume node and then kept as an area of less participation on the end of last month as prices were driven higher quite easily back above the volume shelf of 5216.50 up through the wick of that said 14th bar.
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The session of yesterday to start off the week filled in the volume gap of the previous week after tapering the lows keying off a high volume node found from the balance established May 14th keeping the prices balanced as we continue into this week with JOLTS,PMI and Jobless claims.
For more info on Tradrr, please visit them here.
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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