Buying the Dip Has Been the Play
S&P extends winning streak to 8 sessions
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Our View
The ES reached its all-time contract high of 5721.25 on July 12th and then fell 601.25 points over 14 sessions to 5120.00. From the 5120 low, it has rallied 511.75 points to yesterday’s 5631.75 high and is less than 100 points off its all-time contract high.
The NQ reached its high on July 11th at 20,983.75, then sold off to 17,351.00 on August 4th, a loss of 3,632.75 points. From the NQ’s low to its recent high of 19,871, the future has rallied 2,520 points and is 1,125 points off its all-time contract high.
I know HandelStats thinks the ES and NQ could pullback or selloff at the end of the week, but I think the ES will keep going up right into the end of the month or at least until NVDA reports earnings on August 28th.
According to Goldman Sachs analyst Toshiya Hari, who reiterated his ‘conviction buy’ rating and $135 price target on Nvidia heading into next week’s update, “The demand story for Nvidia remains compelling. While the reported delay in Nvidia’s Blackwell (i.e., next-generation GPU architecture) could lead to some near-term volatility in fundamentals, we expect management commentary, coupled with supply chain data points over the coming weeks, to lead to higher conviction regarding Nvidia’s earnings power in 2025. Importantly, we believe customer demand across large cloud service providers and enterprises is strong, and Nvidia’s robust competitive position in AI/accelerated computing remains intact,” Hari added.
Our Lean
The name of this game is “little dips and bigger rips” and it’s been like that for the last 8 days. It’s been an absolute buy fest. I just told the PitBull that all the Great Rotation did was move people out of the Mag 7 or the top 15 tech stocks and allow new buyers / the dip-buyers to step back in.
The ES has rallied in 8 straight sessions, its best streak of 2024, and is now just 1% off the mid-July record high. The excitement, of sorts, is whether it can rise for a 9th day in a row. If it does, that would be the longest such win streak since 2004, according to Deutsche Bank.
Our Lean: Yesterday’s total ES volume was only 930k, the lowest full session in months, and a bulk of trading volume on the NYSE came late in the day near the imbalance, when volume went from 440 million shares to 872.5 million shares. Like I said yesterday when volume falls that much, “thin to win” takes over. I can’t rule out selling a rip, but the money train is buying the dips.
MrTopStep Levels:
MiM and Daily Recap
ES Recap
The ES reached a high of 5593.75 on Globex and opened Monday’s regular session at 5581.50. It rallied up to 5589.25, then sold off to 5580.25 at 9:39. It subsequently rallied to 5590.50, sold off to 5581.00 at 10:04, and then rallied 11 points to 5592.00 at 10:11. The ES then sold off to the low of the day at 5573.50 and rallied 29.5 points to 5603.00 at 11:06. After the high, the ES pulled back to 5596.75 at 11:18, then rallied to a new high of 5605.50, dropped to 5593.25 at 12:03, and then rallied to 5610.25 at 12:56. After this high, the ES pulled back to 5604.00 and then rallied to 5612.75 at 2:03
It traded up to 5630.25 at 2:48 and then pulled back to 5613.25 at 3:11 and following the pullback, the ES rallied to 5618.50 at 3:49 and traded at 5616.50 as the 3:50 cash imbalance showed $1.67 billion to buy and then rallied up to 5631.75 on the 4:00 cash close. After 4:00, the ES pulled back to 5624.00 and settled at 5625.25, up 45 points or 0.81%. The NQ settled at 19,853.50, up 250 points or 1.28%.
In the end, the ES has closed higher 8 days in a row. In terms of the ES’s overall tone, the NQ acted firmer. In terms of the ES’s overall trade, volume was low: Only 111k contracts traded on Globex and 819k traded on the day session for a total of 930k contracts traded.
Technical Edge
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NYSE Breadth: 84% Upside Volume (!)
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Nasdaq Breadth: 78% Upside Volume
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Advance/Decline: 75% Advance (!)
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VIX: ~15
ES
ES Daily
NQ
NQ Daily
Guest Post — Tradrr
Interest news inbound this week alongside a few more Fed speakers, FOMC Minutes, and Jackson Hole. Keeping an eye over the ZB contract as the latter half of the week will sprinkle in 20-year and 30-year events after the lunch doldrums.
Leaving an excess from the first full week of August capping the move higher to start that week at zone 1 and leaving a higher low with the LVN on the composite with zone 3 has left ZB near the center of the higher end of the composite potentially beginning a balance period around filling zone 2. Should any news come about Jackson hole or the minutes expect a rapid test of zones 1 or 3.
For more Tradrr content, please visit them here.
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!
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