Markets Rally Despite Geopolitical Risks – Is a 48th New High Imminent?

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Our View

In 2023, the S&P 500 did not reach any new all-time highs, although it experienced a strong rally. The index ended up over 20% higher from its October 2022 lows but did not surpass the record peak it set in January 2022, when it reached 4,796 points. Yet in 2024, the ES has made 47 new all-time highs, and it’s highly likely that number goes up into the end of the year. Either way, 2023 and 2024 combined gain is sitting at 56.52%. I am not saying there should not be some concern in the days leading up to November 5th; I just think the public gets fed a bunch of fake news. Who is to say that the markets can’t make several more new highs in November and December, which are two of the best months of the year?

MiM and Daily Recap

The ES traded rallied up to 5869.50 and then down to 5848.00 right before the Globex close. At Monday’s regular session ES opened at 5852. Sluggish out of the gate, prices fell to the day’s low at 5837 down 15 points just 9 minutes into the trading day. Once the low was in, prices rallied 34.75 points up to 5872.25 at 10:24. In just 2 minutes it fell back 15 points to 5856.75. It then rallied back up to 5870.00, sold off down to 5859.00, and then chopped its way back up to a new high at 5873.75. It dropped 11.75 points down to 5862.00 at 12:39, did some slow back and fill, and then rallied 19.75 points up to another new high at 5881.75 at 1:06. After the high, the ES sold off 13 points down to 5868.75, rallied 7 points up to 5875.00, dropped 5 points down to 5870.75 at 2:18, and then rallied 12.25 points up to 5883.00 at 2:42, pulling back to 5877.25 at 3:09. After the pullback, the ES rallied back up to a new high by 1 tick at 5883.25, pulled to 5877.50 at 3:45, and traded 5878.75 as the 3:50 imbalance showed $1.7 billion to sell, and sold off down to 5867.50 at 3:55, then rallied and traded 5871.75 on the 4:00 cash close.

After 4:00, the ES traded up to the high and then sold off down to 5873.25 at 4:06 after Google reported better-than-expected earnings, then rallied 16.25 points up to 5883.75 at 3:15, traded down to 5875.00 at 4:21, and slowly upticked to the 5880.00 level. It settled at 5871.00, up 9.5 points or 0.2%. The NQ settled at 20,447.00, up 159 points or 0.80%. The 10-year U.S. Treasury yield slipped marginally to 4.272%, still near its highest level since July. Bitcoin prices extended Monday’s rally, crossing $73,000, near a record, and front-month Brent crude futures fell 0.4% to $71.12 a barrel.

Everything is moving.

In the end, the ES and NQ have been back and filling and trading the same prices for days. In terms of the ES’s overall tone, it was firm but not as much as the NQ. In terms of the ES’s overall trade, volume was low, 191k ES traded on Globex and 889K traded on the day session for a total of 1.18 contracts traded.

Technical Edge

Fair Values for Oct-23-2024 are as follows, SP: 39.71 NQ: 153.05 Dow: 238.21

Guest Posts: David Dube @PolarisTradingGroup

Prior Session Recap: Cycle Day 2

The prior session’s trade strategy played out like a “well-tuned fiddle,” successfully reaching both the downside and upside target zones. The range widened and volumes increased, providing ample trade opportunities.

For a more detailed recap of the trading session, click on this link: Trading Room RECAP 10.29.24

Learn More About the Taylor Cycle and Secure Your FREE TRIAL Link

Transition from Cycle Day 2 to Cycle Day 3

As we transition into Cycle Day 3, the price closed near the highs of the day with bulls firmly in control. Bullish GOOGL earnings are providing an after-hours bid. The expectation for today’s session is further rally potential, with the 3-Day Cycle Statistic (92%) fulfilled and higher targets remaining open.

Market Rhythm and Preparation

As we know, markets rotate between contractionary periods (range) and expansionary periods (trend). Markets spend most of their time in contraction, absorbing incoming information from various sources, and building up energy for the next trend period.

Our task is to align with these rhythms and exercise patience. Use the contraction period to review trade plans and prepare for different scenarios that may unfold. By preparing during quiet periods, we are ready for the inevitable expansion.

Tech Earnings Reports This Week
Earnings are expected to be the main driver of market activity this week:
10/30/24 >>> META, MSFT
10/31/24 >>> AAPL, AMZN

We remain disciplined in maintaining positions aligned with market forces, which continues to serve us well. Stay the course.

Scenarios to Consider for Today’s Trading

Bull Scenario:
If the price sustains a bid above 5880, the initial target zone is 5895 – 5900.

Bear Scenario:
If the price sustains an offer below 5880, the initial target zone is 5865 – 5860.

 Thanks for reading, PTGDavid

Room Summaries

Polaris Trading Group Summary – October 29, 2024

On Tuesday, October 29, the PTG trading session saw active engagement from David, who provided ongoing guidance despite stepping out due to feeling unwell mid-day. He began by summarizing previous sessions, confirming that both NQ and ES met their initial targets, signaling the day’s targets had been fulfilled as expected.

The session opened with a focus on key levels, specifically the “Line in the Sand” (LIS) at 5860. David outlined scenarios for both bull and bear strategies: a sustained offer below 5860 would target the 5845-5840 zone as a buy opportunity, while holding above the LIS would support potential moves higher. Sellers were aggressive early on, reaching the initial target zone, which prompted a successful buy response that brought prices back up toward 5860, in line with David’s expectations.

Later in the day, David highlighted a fulfilled short position for CL OPR, and he shared a live example of his favored 3-Day Cycle Trade strategy. The long entry on a lower violation level demonstrated the approach’s potential for high ROI.

The day concluded positively for long trades, which effectively reached targeted levels, including the 5880-5885 zone. David underscored the accuracy of the Daily Trade Strategy, which successfully pinpointed the target zones. The session ended with a notable Market on Close (MOC) sell imbalance of $1.7 billion, adding a final observation on market behavior into the close.

Discovery Trading Group Room Preview – October 30, 2024

Trend Levels: Key resistance around 5954-57; support zones at 5767-70 and 5756-61.

Economic Calendar

Full 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!