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Mag 7 earnings disappoint

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Our View

Funny…I received an email from ‘someone’ as part of a group blast to 136 people, and guess what it was? The Opening Print! Normally, I would get pissed off, but I emailed the guy, and he responded by saying he’s been reading the OP for the last 20 years, a few years after he got out of college, and that he runs a family office. 

I didn’t give him a hard time. I sent him the sign-up and asked him to get me some new customers. I’m sure he will be sending out again tomorrow. He did say I have a very good ‘feel’ for the markets… lol. 

Anyways, I want to ask all of you something — and I think you already know you are not going to hurt my feelings — but I would like some suggestions on how you think I can improve the newsletter. We’ll get something ready and I will provide the suggestion link — and please…don’t be shy!

MiM and Daily Recap

The ES traded up to 5618.25 on Globex and opened Tuesday’s regular session at 5607.50. After the open, the ES made a low at 5603.50 and then started a choppy upward move. The first significant increase was up to 5620.75, dropped to the 5611.50 area at 9:57, and traded up to 5626.50 at 10:24. At 10:36:49 AM in the chat, I suggested the ES high might be in for now, with the ES trading around 5622.00. Over the next 18 minutes, the ES sold off to 5604.50 at 11:54. 

After the low, it immediately started to rally and reached 5629.75 at 11:21. After peaking, the ES pulled back to 5624.25 at 11:27, then rallied to a lower high at 5628.75, dropped to the 5621.00 level, traded up to 5626.00, and in one bar dropped to 5612.50 at 12:34. It ticked up and then dropped to 5607.25 at 12:27, before rallying to 5614.00 and started to slide again as the NQ led the S&P lower. The ES traded down to 5603.50 at 1:00, where it began to reverse, making not one but two higher lows at 5603.75 and 5604.50, and traded up to 5617.75 at 2:09. The ES was trading around 5615.50 when I posted this in the MTS room:

and then the ES dropped down to 5607.00 at 2:27 and then made a few higher lows and rallied up to 5615.75 at 3:27. After this high, the ES sold off sharply as the NQ dropped, bringing the ES back to 5599.25 at 3:44 and trading 5602.75 at 4:00. The 3:50 cash imbalance showed $1.3 billion to buy, but then it sold off to 5594.50 and settled at 5602.25, down 6 points or 0.11%. The NQ settled at 19,946.25, down 22.25 points or -0.11%. The yield on the 10-year note inched down to 4.24% after rising for three straight sessions, while crude declined to its lowest price since June. Copper futures fell, marking their longest losing streak since 2020. Lastly, Bitcoin futures settled at 66,440, down 2,650 or -3.84% on the day.

In summary, the ES followed the NQ all day. Overall, the ES was weak, with a sell program hitting the NQ after 1:00 that persisted until the 4:00 cash close. Volume was lower with 1.35 million contracts traded.

Technical Edge

Guest Post — Polaris Trading Group

Topic: Three (3) Day Cycle

Author: David D Dube’ (a.k.a. PTGDavid)

Website: https://polaristradinggroup.com/

Prior Session was Cycle Day 1: Price oscillated in wide range swings fulfilling our upside target 5629, but bulls could not sustain the high bid. Noon “swoon” trapped late buyers driving the price back to open range territory, then back to VWAP where price consolidated during afternoon hours. Finally driving down to our lower target 5595. Price traversed the entire CD1 Range fulfilling both upside and downside targets, establishing a new cycle low at 5587.75.

Here is link to PTG X Feed where we summarize:

Range was 42 handles on 1.334M contracts exchanged.

 …Transition from Cycle Day 1 to Cycle Day 2 

This leads us into Cycle Day 2: Price gapped lower after hours on tech earnings. Normal for CD2 is to establish some balance and consolidation following prior session’s activity. Momentum favors sellers, so we’ll defer to Mr. Market until there is a new structural shift.

You Know The Plan! Our discipline of maintaining positioning that is aligned with market forces continues to serve us well, so stay the course.

As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 5585, initially targets 5600 – 5605 zone. 

Bear Scenario: Price sustains an offer below 5585, initially targets 5570 – 5565 zone.

PVA High Edge = 5622      PVA Low Edge = 5603         Prior POC = 5611

*****The 3 Day Cycle has a 91.67% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history. 

Thanks for reading,

PTGDavid

Economic Calendar

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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!