Nasdaq Down Four In A Row, Longest Losing Streak Since November 2016

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 11 out of 11 markets closed higher: Shanghai Comp +0.63%, Hang Seng +0.97%, Nikkei +0.72%
• In Europe 8 out of 12 markets are trading higher: CAC -0.01%, DAX +0.17%, FTSE -0.21%
• Fair Value: S&P -0.80, NASDAQ +4.42, Dow -18.11
• Total Volume: 1.6mil ESH & 837 SPH traded in the pit

Today’s Economic Calendar:

William Dudley Speaks 10:15 AM ET, Eric Rosengren Speaks 10:15 AM ET, Baker-Hughes Rig Count 1:00 PM ET, Loretta Mester Speaks 1:30 PM ET, and John Williams Speaks 3:40 PM ET.

S&P 500 Futures: Two And A Half Days Of Down, A Big Fat Rip And Lots Of Stop Runs

Yesterday was one big stop run, all day long. As the MiM went from $600 million to sell, to $800 million to sell, to $1.65 billion to sell, the ES sold off down to 2696.50 and then popped up to 2707 at 2:51. On the 3:00 cash close the ES traded 2703.50 and then went on to settle at 2711.75 on the 3:15 futures close, up 13.25 handles, or +0.49 %.

The (MiM) MrTopStep Imbalance Meter

A great MiM example illustrating my closing action point I was attempting to make in my last posting. These are the MiMs that I like. I have underlaid the MiM on an ES futures chart to show price action during the MiM activity between 2pm ET and 4pm ET closing.

The vast majority of that time, the first hour, I am just observing the trend of the MiM. Yesterday we opened with a small sell side imbalance, but it progressively built more negative as time scrolled on. I like that. My first trading decision point was 3pm ET, but the MiM was not strongly biased enough for me to take it.

I am running the MrTopStep open house this week, so trading and talking at the same time are hard. In fact, doing either by itself for me is difficult. By 3:20 PM the MiM was in range, but I stood aside and let that entry go by. The growth of the MiM between 3:20 and 3:30 was steady and approaching $1B, and the breadth indicators were moving solidly to the bearish trigger area. I liked it even more.

I took an entry into ES at 2708 short, this is where faith takes over. Price over the trade period did traver a couple of points against me, but the continual growth of the sell side of the MiM was reassuring that the MOC was going to be a sell at the 3:45pm reveal. That is the time when the MOC orders are locked and the data is widely distributed. Our MiM was predicting that was going to be decent to the sell side.

Just before the reveal we were showing 1.6B to sell and that was pretty much right on. That top line alignment doesn’t always happen as we are subsampling data up until the reveal which is why I use the breadth data to determine the commitment to one side or another.

After ten points down, still on the microphone, I hit market to exit and filled 98.25. A decent trade and a lucky escape. That 3:50pm massive green bar was the result of the Nasdaq 100 closing, called the crossing. The Naz “reveal” had some massive buys. How do I know that? Because of the value of community trading, we have some great traders in our MiM room and they share data from other sources.

Every closing is not like this, but when a surprise reveal happens at 3:45pm the markets do move to it. Somedays it is tool small to care.

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As always, please use protective buy and sell stops when trading futures and options.

_{Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.}