Nvidia, Tech Weighs on S&P 500

Can it bounce back today?

Follow @MrTopStep on Twitter and please share if you find our work valuable!

Every week, MrTopStep invites traders to an “Own the Close” contest where the closest guesstimate where the SPX will settle on Friday’s 4:00 cash close.

The winners get a free week’s access to the MrTopStep Chat and trading tools. Enter your guess now!

Our View

It’s never good for the markets when its main bellwether stock — in this case, NVDA — is down. 

Was yesterday’s chop just a refuel for a PPI/retail sales rip today? My guess is that it is. Yes, the ES and NQ did sell off late, but they recovered most of the MOC selling. 

PitBull and I were talking recently. We said, one of these times when everyone gets too bulled up and complacent, there will be a giant rug pull.

MiM and Daily Recap

The ES had a shallow pullback down to 5235.00 and opened Wednesday’s regular session at 5243. After the open, the ES sold off down to 5228.75 at 10:02 and then slowly stuttered stepped its way back up to the 5240.00 at 10:46 and was quickly rejected above the VWAP as the NQ down-ticked and pushed the ES down to 5230.25 at 10:58 and then rallied up to a lower high at 5239.25 at 11:24. From there, it dropped down to a higher low by 1 tick at 5230.50 at 11:44 and then slowly started to rise — and the NQ started bouncing — pushing the ES up to the 5246.00 level at 1:33. 

The ES then sold off down to 5239.75 at 1:35 and for next hour and a half, it traded in a 4 to 6 point range above the VWAP until the NQ sold off under the VWAP and the ES sold off down to 5234.75 at 3:13, rallied back up to 5240.00 and then dropped 22.5 points down to 5217.50 at 3:27, traded back up to 5231.50 and then chopped in a 3 to 5 point range and then rallied up to the VWAP at 5236.25 at 3:49.

The ES traded 5235.75 as the 3:50 cash imbalance initially showed $75 million sell and then flipped to $900 million to buy and sold off down to 5228.50, and the NASDAQ imbalance showed $860 million to sell and sold off 50 points right away. After the drop, the NQ rallied 46 points and the ES traded 5233.50 on the 4:00 cash close. After 4:00, the ES traded up to 5238.75 and settled at 5237.75 on the 5:00 futures close, down 1.25 points or 0.02%, the NQ settled at 18,355.50, down 116 points or -0.63%, crude oil closed up $2.04 or +2.63% to $79.60, Bitcoin settled at a new high at $73,745, up 1,945 points or 2.71%, the 10-yr note settled at 110.285, down 0.090 or -0.25% on the day. 

In the end, the lack of news and economic reports, and with the rollover left the ES and NQ stagnant in a low-volume, choppy-range trade. In terms of the ES’s overall tone, NVDA, AMD (and other chip stocks), TSLA and AAPL held back the NQ, which acted as a drag on the ES. In terms of the ES’s overall trade, volume was low: 180k ES traded on Globex and 1.118 million traded on the day session for a total of 1.298 million contracts traded including the ESM/H spreads.

Technical Edge

Guest Post

My name is Pam Schussler, the owner of TickTitan Trading. I run my trading room at MrTopStep.

This is my first weekly post so please bear with me until I nail down my weekly post. My site is getting some work done on it, but here is a link to learn more about my services. 

Quick introduction: I have been trading the Futures markets full-time for approximatley 15 years now.  I did take a few years off because I was suffering from trigger paralysis, but it turned out to be the best thing I could have done for myself and my trading career.  I truly believe that if I had not stepped away from trading for 4 and a half years, I would not be the trader I am today.

NQ is my preferred poison.  I generally scalp the NQ from the Opening Bell until about 1 p.m. EST.  That does not mean I am actively trading the whole time, but I am at my trading desk and I am prepared to take a trade should one set up.

I have a handful of setups, and they are based on price action or price action with delta.  One specific setup that I have traded for a few years now which I call Athena, which is a 3-line strike that I personally modified to give it an above-average profit ratio, can be used across any instrument, and it is currently set up for CL, ES and NQ Daily charts.  I trade this specific setup on a 15-minute, 60-minute or a daily.  I have taught it to others, and we all know how it goes …   Teach one setup to 10 traders, and it will be traded 10 different ways!  Hey, that is what makes trading so fascinating!  You just never know if someone can take your setup and make it even better.  That said, I stick with my rules, and I teach them in my room on a daily basis.

Back to the current prices that I am currently monitoring: CL for a break of $77.57.  My entry will be 1 tick below, right at $77.56.  Should CL continue to grind higher, this setup will be invalid.  It must break below $77.57 by the close of trading on Friday, March 15th or it will be invalid.

ES:  same scenario.  I am monitoring ES for a break below 5228.75 – entry is 1 tick below at 5228.50  Should ES continue to grind higher, this setup will be invalid.  It must break below 5228.75 by close of trading on Friday, March 15th or it will be invalid.

NQ:  Exact same scenario as above.  Watching for a break below 18281.75 – entry is 1 tick below at 18281.50  Again, it must break below 18281.75 by close of trading on Friday, March 15th or it will be invalid.

How far will these go should they trigger?  No clue.  Impossible to know how far any market will go.  All we can do is manage a trade once we enter.  Finding ways to enter any market is the easy part.  Working on building setups based on price action/price patterns, and then trading them for months on end and ensuring that there is a high win rate, is what I am always working on as a trader.  Athena is one of my favorite setups, as it has stood the test of time. 

When I am trading in my room, I alert fellow traders when I am exiting.  We all know that trading is not ‘cut and dry’, so to speak.  On that note, all I can recommend is that you use what you deem proper risk management.  Everyone has a different account size and risk tolerance.  Never get married to a trade – taking profits when you can has never hurt your bottom line!  Since all 3 of these setups are to the downside, I strongly recommend taking profits sooner vs later …

Economic Calendar

For a more complete Economic Calendar see: https://mrtopstep.com/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!