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Bombs Away
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Our View
We live in interesting times, and unfortunately, not all of it is good. As I’ve long predicted, there has been an expansion of the war in Ukraine. Yesterday’s use of U.S.-provided long-range missiles will likely escalate the conflict further. Putin’s red line has been crossed, and it’s highly likely he will return the favor.
Meanwhile, Iran has increased its stockpile of enriched uranium to 60%, which has no civilian application. At 90%, uranium becomes weapons-grade. I think Russia has given Iran what it needs to build nuclear weapons while Chinese President Xi is warning the US to stay out of the Taiwan Strait. Six months ago, a few friends laughed at me when I said we were inching closer to WWIII. They are no longer laughing. Geopolitical risk is skyrocketing.
Our Lean
I called it well yesterday but I traded terribly. I went long before the open, but the ES entered a hard chop until 10:30 AM when the buy programs came flying in. I think Russia saying they would not use nuclear weapons and NVDA rallying almost 5% buoyed the market.
I still think we can see higher prices, but after a 100-point rally, I expect a barrage of headlines. I am still not sure how the market will react to NVDA’s better-than-expected earnings. it could be a big rip and dip or just straight up.
Our lean is to buy the 30- to 50-point pullbacks and look for 5975–5980, with tons of buy stops that go all the way up to 6010.00.
MiM and Daily Recap
After President Biden approved Ukraine’s use of longer-range missiles into Russia for the first time, Ukraine did not delay in deploying them—a major escalation coinciding with the 1,000th day of the war.
The ES futures market responded sharply, initially tanking over 50 points down to 5855.00 at 9:02 AM, then trading up to 5883.50 at 9:29 AM. Tuesday’s regular session opened at 5883.75. After reaching 5894.50 at 9:45 AM, the ES sold off by 18.25 points at 9:54 AM before rallying 35 points to 5929.00 at 11:39 AM.
It then dipped 12 points to 5917.00, rallied 15.25 points to 5932.25 by 12:39 PM, and dropped another 7.75 points. Following this brief downside move, the ES surged 23 points to 5947.50 at 2:00 PM, then fell 20.5 points to 5927.00 by 2:39 PM. The market crept back up to 5939.50 at 3:49 PM.
At 3:50 PM, the cash imbalance showed $1.6 Billion to buy, and the ES traded as high as 5942.25 at 3:51 PM before closing at 5931.75 at 4:00 PM. Post-close, the ES touched 5944.50, pulled back to 5937.00, and settled at 5937.50—up 17.50 points or +0.30%.
Meanwhile, the NQ settled at 20,754.50, up 121 points or +0.59%. Bitcoin reached a new all-time high of $94,000. Gold rose 0.6% to $2,627.10 per troy ounce, while the 10-year Treasury yield settled at 4.378%, down from 4.413% on Monday.
In the end, algorithms made mince meat out of short sellers as NVDA surged higher. The NQ led the upside tone for the ES. Total volume for the ES was elevated, with 1.54 million contracts traded.
Technical Edge
Fair Values for November 13, 2024:
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SP: 22.11
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NQ: 83.58
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Dow: 129.97
Daily Market Recap 📊
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NYSE Breadth: 49% Upside Volume
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Nasdaq Breadth: 71% Upside Volume
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Total Breadth: 58% Upside Volume
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NYSE Advance/Decline: 47% Advances
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Nasdaq Advance/Decline: 54% Advances
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Total Advance/Decline: 52% Advances
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NYSE New Highs/New Lows: 109 / 73
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Nasdaq New Highs/New Lows: 86 / 228
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NYSE TRIN: 0.92
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Nasdaq TRIN: 0.51
Weekly Market 📈
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NYSE Breadth: 42% Upside Volume
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Nasdaq Breadth: 55% Upside Volume
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Total Breadth: 50% Upside Volume
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NYSE Advance/Decline: 28% Advances
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Nasdaq Advance/Decline: 28% Advances
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Total Advance/Decline: 28% Advances
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NYSE New Highs/New Lows: 543 / 147
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Nasdaq New Highs/New Lows: 817 / 488
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NYSE TRIN: 0.74
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Nasdaq TRIN: 0.87
Guest Posts
PTG David: Polaris Trading Group
Prior Session was Cycle Day 2: Markets dipped below the CD1 Low 5886.50 down to the Violation Zone where active responsive buyers took control and reclaimed the broken low. In doing so bulls established dominance, absorbing all the sellers, then orchestrated a breakout above open range, thereby establishing a reversal up trend. Price ultimately fulfilled the 3 Day Cycle initial target at 5947 as guided in the live trading room. Range for this session was 92 handles on 1.534M contracts exchanged.
For a more detailed recap of the trading session, click on this link: Trading Room RECAP 11.19.24
…Transition from Cycle Day 2 to Cycle Day 3
Transition into Cycle Day 3: Bulls have regained firm control, so it will be theirs to lose. Having closed near the high of the day, expectation is for momentum to spill-over into today’s trading, with additional 3-Day Cycle objectives to be fulfilled.
So with this in mind, our “game-play” will remain true to our discipline in maintaining positioning that is aligned with market forces which continue to serve us well, so stay the course.
As such, scenarios to consider for today’s trading:
Bull Scenario: Price sustains a bid above 5945, initially targets 5960 – 5965 zone.
Bear Scenario: Price sustains an offer below 5945, initially targets 5935 – 5930 zone.
PVA High Edge = 5948 PVA Low Edge = 5930 Prior POC = 5944
ES (Profile)
Thanks for reading, PTGDavid
Jeff Hirsch @AlmanacTrader
Feast On Small Caps Thanksgiving to Santa Claus Rally Trade
Thanksgiving kicks off a run of solid bullish seasonal patterns. November-January is the year’s best consecutive 3-month span (2025 STA p 149). Then there’s the January Effect (2025 STA p 112 & 114) of small caps outperforming large caps in January, which begins in mid-December.
And of course, the “Santa Claus Rally,” (2025 STA p 118) invented and named by Yale Hirsch in 1972 in the Almanac. Often confused with any Q4 rally, it is defined as the short, sweet rally that covers the last 5 trading days of the year and the first two trading days of the New Year. Yale also coined the phrase: “If Santa Claus should fail to call, bears may come to Broad and Wall.”
We have combined these seasonal occurrences into a single trade: Buy the Tuesday before Thanksgiving and hold until the 2nd trading day of the New Year. Since 1950, S&P 500 has been up 79.73% of the time from the Tuesday before Thanksgiving to the 2nd trading day of the year with an average gain of 2.58%. Russell 2000 is up 77.78% of the time since 1979, average gain 3.34%.
Trading Room Summaries
Polaris Trading Group Summary – Tuesday, November 19, 2024
Morning Session Highlights:
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The trading day began with a review of key levels and strategies:
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Bullish above 5915, targeting 5925–5930.
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Bearish below 5915, targeting 5890–5885.
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Early market activity tested both upper and lower target zones outlined in the Daily Trade Strategy, showcasing its effectiveness.
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Key focus on Cycle Day 1 Low (5886) as a pivotal decision point. Initially, bears gained momentum, forcing liquidation. However, bulls successfully reclaimed 5886, signalling a shift back to a long bias.
Positive Trade Execution:
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Multiple opportunities for long trades emerged:
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The “A10 Long” strategy played out successfully.
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A4 setups provided lucrative dip-buying opportunities.
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Reclaiming and converting above 5886 followed by a breakout above the opening range confirmed bullish dominance.
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@ES achieved an official gap fill by mid-morning, aligning with strategic targets.
Afternoon Session Highlights:
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Momentum continued in favor of the bulls:
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Buyers overcame significant selling pressure, including sweeping a 4K contract Iceberg at 5932.50.
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Cycle Long Call reached the projected target of 5947, with the move fulfilling expectations.
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Lessons emphasized by PTGDavid:
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Once cycle targets are fulfilled, tighten stop losses or exit positions due to increased reversal risk.
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Consider short positioning only after confirmed shifts, such as the A4 pivot.
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Closing session: Bulls held above PH 5933, maintaining control into the close.
Key Lessons Learned:
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Importance of respecting major decision points, such as Cycle Day 1 Low (5886), which acted as a linchpin for market direction.
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Reinforcement of risk management principles, particularly after target fulfillment.
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Adapting to market conditions—identifying when to switch from aggressive buying to cautious profit-taking or short positioning.
Overall Performance:
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The day was highly productive for the trading room, with strong adherence to the planned strategy.
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Bulls maintained a commanding presence, fulfilling upside targets and closing the day above critical levels.
Excellent execution and team engagement contributed to a successful trading session.
Discovery Trading Group Room Preview – November 20, 2024
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Market Overview: Nvidia (NVDA) led a pre-earnings rally, rising 5% on Tuesday and lifting the Nasdaq 100 over 1%. The S&P 500 closed up 0.4%, while the Dow dipped 0.3%.
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Geopolitical Update: Tensions between Ukraine and Russia escalated as Russia revised its nuclear doctrine. This followed Ukraine’s first aerial attack over the Russian border, supported by U.S.-approved long-range missile use. Gold surged 1% to $2,600, and Bitcoin reached a new record high above $93,500.
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Nvidia Focus: Nvidia reports earnings after the bell, providing insights into the AI market via Q4 guidance. Nvidia stock is up 189% YTD, contrasting with AMD, down 8% in 2024. Nvidia’s technology also powers Microsoft’s new AI agents announced yesterday.
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Corporate Earnings:
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Premarket: Pfizer (PFE), Target (TGT), TJX Companies (TJX), WIX.
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After Market Close: Nvidia (NVDA), Palo Alto Networks (PANW), Snowflake (SNOW).
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Walmart beat Q3 expectations, rising 4% on Tuesday, while warning of potential price increases due to proposed tariffs.
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Economic and Fed Updates:
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Light economic calendar with Crude Oil Inventories at 10:30 AM ET.
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Fed speakers: Michael Barr (10:00 AM ET), Lisa Cook (11:00 AM ET), Michelle Bowman (12:15 PM ET).
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Market Technicals: Volatility expanded Tuesday with bullish sentiment leading into the U.S. session. The S&P 500 (ES) trades in its uptrend channel, with support at 5807/12 and resistance at 6090/95. The 50-day MA at 5840.25 remains a key short-term bullish marker.
Whales are leaning bullish in light premarket volumes, setting a cautiously optimistic tone for today’s session.
ES -Week to Week
Last week we called for 5950 to hold, but that was taken out and 5900 is became the holding area. Slowly we climb over the previous previous high at 5915 as it rides the middle of our BBs. Bulls need to regain 6000 and bears need to own 5850.
NQ – Week to Week
Still digesting the Trump rally as investors square for the end-of-the-year.
21,100 for the hold
21,250 clear and a run for the highs
Bulls looking to retake the July high around 20932 Bears need to show that 20500 is nothing special.
Calendars
Today
Important Upcoming
Earnings
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!
This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.
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