Final Trading Days of October Packed with Big Name Earnings and Eco Reports

Earnings and outlooks will set the pace.

Follow @MrTopStep on Twitter and please share if you find our work valuable!

Our View

Today marks the 94th anniversary of the 1929 Crash, when the Dow dropped 23% on October 28th and 29th. However, November typically begins the best six-month period for stocks, with only nine days and seven sessions left until the U.S. presidential election. This week, numerous major earnings reports are due, along with 13 economic releases, including CAPDP, GDP, PCE, and the October Jobs report on Friday—the first trading day of November, historically a bullish day.

MiM and Daily Recap

The ES traded down to 5844.25 at 1:15 am, rallied back up to open cash at 5870 in a strong gap and go drive up to 5900.75 at 10:23 which was the high of the day. After setting the high, the market decayed to 5872 at 11:31 and paused before the next leg down began at 12:30 from 5883.25 down 45.50 point to 5839.75 at 1:44 and finally marking the low of the day at 2:10 printing 5835. From the low it rallied 24.75 point to 5859.75 before a downward drift into the cash close of 5845.

It traded around 5849 as the 3:50 cash imbalance showed $1.6 billion for sale and then traded at 5845 on the 4:00 cash close. After 4:00, the ES flat-lined into the weekly close at 5841.50. The ES settled at 5841.75, down 11.25 points or -0.19%, while the NQ settled at 20,476.00, up 85 points or +0.42% on the day.

In the end, the markets seemed to weaken before headlines broke about 10 U.S. refueling jets heading to the Middle East. From that point, headline-driven algo sell programs took over, persisting until the close. For the ES, it was part of a buy NQ, sell ES rotation from the start, with steady trading volume at 1.3 million contracts.

How to read the MIM

Technical Edge

MrTopStep Levels:

How to read/use the MrTopStep Levels

Guests Posts –

Polaris Trading Group Summary Oct 25th:

Friday’s session completed a strong 3-Day Cycle, with bullish momentum driving prices into key target zones. PTGDavid identified the Line in the Sand (LIS) at 5850, which supported an initial upside target of 5865-5870. The focus for the day was on defending this bullish support for higher targets, with the ultimate Cycle Day 3 (CD3) goal near 5900. Early in the session, buyers managed to clear the 5865-5870 zone, setting up an objective at 5880, which was achieved by mid-morning, and then targeting 5903.75, fulfilling the day’s bullish expansion expectations.

Positive performance was also noted in the 3-Day Cycle CALL Option play, hitting a 2:1 tracking performance, even reaching up to 4:1 based on the selected strike price. However, a strategic shift began around mid-day as selling pressure emerged. David suggested selling into rallies after observing increased resistance near the 5900 level, signaling that buyers were likely exhausted. This setup, combined with a lunchtime breakdown through the open range low, prompted a shift to a downside bias.

In the afternoon, a classic “Look Above and Fail” pattern was observed, emphasizing the importance of recognizing reversal signs in strong price action. Following this, prices retraced to the LIS at 5850. David encouraged a “walk away” approach for the afternoon as prices ranged between 5835 and 5902, eventually closing quietly near the 5850 level. Notably, a Market-On-Close (MOC) sell imbalance of $1.8 billion was observed, which added to the day’s bearish pressure into the close.

Key Takeaways:

Overall, the day highlighted disciplined adherence to targets and tactical adjustments in response to shifting momentum, wrapping up a positive week.

DTG Room Preview – October 21, 2024

This week is critical for the “Magnificent Seven” as Alphabet, Apple, Amazon, Microsoft, and Meta report earnings, alongside other major S&P 500 names like Ford, AMD, McDonald’s, Eli Lilly, and Exxon. Currently, 37% of S&P 500 companies have reported Q3 earnings, with growth at 3.7% year-over-year, the slowest pace since Q2 2023. While the Magnificent Seven are projected to see an 18.1% earnings increase, the remaining S&P companies are expected to gain just 0.1%.

The economic calendar is packed, featuring PCE, October’s jobs report, and Q3 GDP estimates, with a keen focus on Friday’s employment report—anticipated to be noisy due to recent hurricanes, strikes, and furloughs. Analysts will watch the unemployment rate closely as a clearer labor market gauge.

Looking forward, the November Fed meeting has markets heavily favoring a 96% chance of a 25-basis point rate cut. Meanwhile, stronger-than-expected economic data has pushed the 10-year Treasury yield up 50 basis points over the past month to around 4.2%, a potential headwind for equities. Volatility has increased, with the ES 5-day average daily range hitting about 60 points. The ES remains within its uptrend channel, leaving opportunities for both bulls and bears to navigate key levels.

Support/Resistance Levels: Key support zones are 5761/64s and 5740/45s, with resistance around 5944/47s.

Economic Calendar

Full 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!