I’m Not Buying Into There Being a Low — Yet

Too many risks remain right now

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Our View

It’s been over 17 days since Hamas attacked and killed over 1,400 Israeli citizens and 13 days since it began its military build-up near the Israeli border.

After falling in four straight sessions, the ES has had two big days of short-covering rallies (although technically still closed lower on Monday). Still, it’s been trying to find a footing.

The PitBull’s rule is that the ES tends to rally early in the day and early in the week, and while the ES may be ‘trying’ to rally, I still think it will be sold. I’m going to keep it at that.

MiM and Daily Recap

The ES traded up to 4268.25 on Globex and opened Tuesday’s regular session at 4261.75. After the open, the ES traded 4260.50, rallied up to 4274.50 and then sold off down to a new low at 4259.50 at 10:51. From there, it traded up to 4283.50 at 10:50 and then sold off all the way down to 4242.00 at 12:56. Yes, there were a lot of little pops and drops along the way, but in the name of lowering the size of the recap, that’s what happened.

After the low, the ES rallied up to the 4261.00 area at 1:32, back-and-filled under the VWAP until 2:19 when the ES rallied 14.5 points to a new high at 4272.00 at 2:33. It then made 6 new highs up to 4276.25 at 3:49, traded 4275.50 as the 3:50 cash imbalance showed $1.7 billion to buy and then climbed up to 4284.75 on the 4:00 cash close. After 4:00 when MSFT and GOOGL reported earnings, the ES traded up to 4290.50 at 4:02 and then traded down to 4267.00 at 4:06, rallied back up to 4282.75 at 4:11 and traded 4270.25 on the 5:00 futures close, up 29.50 points or up 0.70%.

In the end, there continues to be a high level of nervousness surrounding the index markets. In terms of the ES’s overall tone, there was a high level of two-way price action with the bull winning out. In terms of the ES’s overall trade, volume was lower: 276k traded on Globex and 1.453 million traded on the day session for a total of 1.729 million contracts traded.

Technical Edge

Guest Post

PTG / Taylor 3 Day Cycle

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

Website: https://polaristradinggroup.com/

Prior Session was Cycle Day 1 (CD1): We wrote in prior DTS 10.24.23 Briefing: “Markets are at their targets, therefore the rally could start at any time and may negate the ES failure.” As expected, markets rallied from the opening and negated yesterday’s failure. Prior range was 48 handles on 1.757M contracts exchanged.

…Transition from Cycle Day 1 to Cycle Day 2

This leads us into Cycle Day 2 (CD2): Though the expected rally did unfold in prior session bulls could not sustain high bid, hence retreated back to the 5-day Point of Control (4265). Normal for CD2 is typically for some consolidation of recent activity. Two-way choppy flow is anticipated given both sides are battling for dominance. As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4265, initially targets 4280 – 4285 zone.

Bear Scenario: Price sustains an offer below 4265, initially targets 4250 – 4245 zone.

PVA High Edge = 4277 PVA Low Edge = 4260 Prior POC = 4271

*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.

For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:

Link to access full Cycle Spreadsheet > > Cycle Day 2 (CD2)

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!