Retail Sales in Focus This Morning
Tech continues to rest
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Our View
Retail sales, Import Price Index, Business Inventories and the Home Builder’s Confidence index are in focus, while Fed Gov Kugler speaks. I don’t know what the impact will be, but when the dust settles, the ES is still going up.
The reason the ES and NQ sold off yesterday is that both were extremely over-extended. Say what you like, but there was $2.3 billion for sale late in the day, which pushed selling into some of the tech names which in turn put pressure on the S&P.
On another note, I took a tumble off my Polaris GEM car. A jacked up Ford 150 ran a red light and I had to swing quickly out of the way, but I fell out of the cart and broke my nose, bruised ribs, wrist, and scrapes all over my hands, arms and legs. They got the driver for running the red light, but I’m not kidding there is not one part of me that isn’t hurting. It’s hard doing the report so if you see a reduced version this week it’s because I’m scaling back. I just don’t bounce as well as I used to.
Our Lean
I’m a bull, but I ain’t no fool!! Meaning the higher this goes the greater the chance of a pullback.
Is the ES going to 5750? It could, but I don’t think we are going to 5800 as quickly as some of the last 100 points moves up. As we get closer to the end of the third week of July, I think there is a good possibility we see some selling or some sell-side rebalancing.
I’m not in the camp that we see a big drop. I just don’t see it and I think it’s silly to speculate on a 10% dip. I can’t rule out a big drop eventually in the future, but as traders we have to live in the here and now — and the now still says you do your best to buy the pullbacks!
Our Lean: I can’t rule out selling some rips, but ideally I’ll buy the 25 to 35 point pullbacks. If you look at the ES chart it looks like 5698 to 5702 is big. A hold above there could put the ES right back up on its high.
MrTopStep Levels:
MiM and Daily Recap
ES Recap
After the Trump assassination attempt, the ES rallied up to 5708.25 and opened Monday’s regular session at 5669.50. After the open, the ES shot up to another new all-time contract high at 5798.00 at 9:42 but quickly dropped down to 5683.25 at 9:48. By 11:26, it rallied 35.5 points up to 5618.75. After reaching this high, the ES sold off to 5702.25, then rallied up to a lower high at 5711.75, dropped down to the 5701.50 level, made another lower high at 5708.75, and then proceeded to make a series of lower lows down to 5691.25 at 12:24.
It rallied back up to 5702.00 but then started to sink, trading as low as 5676.75 at 1:34. It then rallied up to 5685.75, briefly made a new low by 1 tick at 5676.50, and then rallied back up to 5695.25 at 2:34. It sold off again to 5672.25 at 3:48, popped back up to 5679.00, and traded 5675.50 as the 3:50 cash imbalance showed $2.3 billion to sell. It then sold off to 5666.25 at 3:52, rallied to 5682.00 at 3:57, and finally traded up to 5688.00, settling at 5685.75 by the 4:00 cash close. After 4:00, the ES rallied up to 4689.75 and settled at 5688.25, up 23.50 points (+0.41%). The NQ settled at 20,525.25, up 101.25 points (0.49%).
In the end it was the Trump bump and dump. In terms of the ES’s overall tone, it looked like the NQ took a breather. In terms of the ES’s overall trade, volume was steady: 165k ES traded on Globex and 1.472 traded on the day session for a total of 1.637 million contracts traded.
Technical Edge
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NYSE Breadth: 55% Upside Volume
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Nasdaq Breadth: 61% Upside Volume
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Advance/Decline: 59% Advance
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VIX: ~13.25
Guest Post — Tradrr
The market continues upwards and onwards which allows us to take a short term view over the most recent weeks considering this information the best to lean on as we explore potential new heights for the Nasdaq.
1. With a flat buzz haircut of an end to last week we cut above on Monday and settled right back into to end the previous day. Should this action of price be left untested the remainder of this week we either build and drag volume to accept these prices or begin to fill out the troughs below.
2/3. Should we begin a descent to revisit these divots in the profile it’d be imperative to monitor how these areas get filled/tested to resume higher or begin the process of building out some balance below zone 3. Considering events over the weekend potentially failing to incur an increase of volatility as many speculated it leans on each upcoming 8:30am est scheduled events to induce volatility and volume for more definitive clues towards continuation or rest.
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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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