Fed Speak, Beige Book, GDP Now. Should be an active day

Our View

Let’s say it like it is, the futures index markets are coming off their 10th positive week in 11. The Dow and S&P 500 gained 0.3% and 1.8%, respectively, last week and the Nasdaq closed up 3% for its biggest weekly gain since November. Plain and simple, the ES and NQ got spooked by higher rates and the threat of a larger war in the Middle East. I really believe 2024 is going to be a year of extreme moves.  Am I still bullish? Like I said yesterday, the ES has made several attempts to take out 4840 and runs out of gas every time. Rejections are not bullish but maybe the ES just needs to come down a bit, find its footing, and go back up. But I also think Iran has been waiting for years for the US to step into a war with one or more of its proxies. They have not been chanting ‘death to Israel and the US’ for nothing and they are also setting up camp in S. America. I have always said the next war the US gets into will be the Middle East and don’t be surprised when you wake up and the US is in full battle mode. In addition, the fact that it is an election year and the Fed’s BS about lowering rates 6 times this year have also thrown a shadow of doubt over the markets.  Yesterday, Federal Reserve Governor Christopher Waller said that interest rate cuts are likely this year, but also said that the central bank can take its time relaxing monetary policy. Like I said above, get ready for a big year of rip-your-face rallies and plunges. 

Handelstats Levels

$ES Currently trading 4778.50. Upside: Trade and hourly close above 4780.75 targets 4785.12 then 4789.50, hourly close above there targets 4795.12 then Settlement 4798.75. Hourly close above there targets 4803, hourly close above there targets 4809.50, hourly close above there targets 4826 and +1sd 4827.84.

Hourly close above there targets 4835.25, 4837, 4838.75, 4841.25. Hourly close above 4841.24 targets +2sd 4856.92. 

Downside: Hourly close below 4780.75 targets -1 sd 4769.66. Hourly close below there targets 4764.25, hourly close below there targets 4757.88 then -1sd weekly level 4755.36. Hourly close below there targets 4749.50, hourly close below there targets -2sd 4740.58. Hourly close below there targets 4735.25 then 4732.50. More in review.

MiM and Daily Recap

The ES traded down to 4785.25 on Globex and opened Tuesday’s regular session at 4802.00. After the open, the ES traded up to 4805.50, sold off down to 4783.50 at 9:51, and then rallied up to a 4815.00 triple top at 10:58. The ES then sold off down to a higher low at 4795.25 at 11:01, rallied up to a lower high at 4807.00, back and filled at the vwap, and then rallied up to a new high of 4815.75 at 11:22. After the high, the ES sold off down to a 4794.25 double bottom, did another minor back and fill, dropped down to a 4789.50 double bottom at 12:52, and then popped up to a 4801.25 double top 1:36. The ES then sold off down to 4786.75, rallied up to 4794.25 at 3:30 as the early NYSE imbalance showed $1.55 billion to sell. It then sold off down to 4786.75 at 3:35, traded up to 4793.50, dropped to 4790.75 as the 3:50 cash imbalance showed $2.3 billion to sell, and traded 4798.50 on the 4:00 cash close. After 4:00 the ES rallied up to 4800.50? and settled at 4799.00, down 14.5 points or -0.30% on the day. 

In the end, geopolitical events in the Middle East, the yield on the 10-year note rising 5 basis points to trade just under 4% at 3.999%, and the 2-year and 30-year note yields weighed on the Nasdaq and S&P. In terms of the ES’s overall tone, the ES acted weak. In terms of the ES’s overall trade, volume jumped, 255k traded on Globex and 1.404 million traded on the day session for a total of 1.659 million contracts traded.

Guest Post

PTG/Taylor 3 Day Cycle

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

Website: https://polaristradinggroup.com/

Prior Session was Cycle Day 2 (CD2):  Bulls failed to overcome this day’s Line-In-Sand (4815) as outlined in prior DTS 1.16.24. Multiple buying attempts were rejected as the bus got “too full”, which preceded a liquidation break, pushing price down to 4775 – 80 zone before finding “bargain-basement” buyers. Ultimately price closed at mid-vwap, which is characteristic of a Cycle Day 2. Prior range was 36 handles on 1.668M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): Price closed below Cycle Day 1 Low (4806.50), as historical odds favor recovering this level to satisfy the Three-Day Cycle Statistic. Price also continues to remain range bound within multi-day composite value between 4775 – 4830. (See chart image below). Our daily plan remains unchanged… Stay flexible and in-alignment with the primary intra-day forces. As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4800, initially targets 4815 – 4820 zone. 

Bear Scenario: Price sustains an offer below 4800, initially targets 4785 – 4780 zone.

PVA High Edge = 4803       PVA Low Edge = 4788        Prior POC = 4800

Range Projections and Key Levels (ES) March 2024 (H) Contract

HOD  ATR Range Projection: 4847; LOD ATR Range Projection: 4747; 3 Day Central Pivot: 4808; 3 Day Cycle Target: 4806; 10 Day Average True Range  53; VIX: 13

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Thanks for reading,

PTGDavid

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!