Last week in the OP I wrote, “If the bulls cannot reach 3276.50 this week, then that is a high failure and a very bearish signal. Expect the 3470s previous resistance to become short-term support although I do not expect the support to be strong. The former 3420-3240s resistance should become strong support if the current rally fails this week.” On Wednesday, the 3470s support held the low of the day (LOD). On Thursday, the 3420-3240s held the LOD and again on Monday (yesterday), although the ESZ20 probed slightly beyond, setting up the 3405/10s area as the next area of support. Below the new 3405/10s support area, the support areas remain the same as last week:
This week’s price action has unfolded several new resistance areas above.
3576.50 – back-adjusted all-time high
Last week the ESZ20 made about a 150-point pullback fueled by the uncertainty over a fifth US coronavirus relief bill before the Nov 3 elections. House Speaker Pelosi had made Tuesday (today) the deadline for a relief bill before the election and is still in talks with the White House. An agreement would bring out the bulls and we should see all-time new highs tested this week. Otherwise, with a high failure firmly in place, look for the ESZ20 50-day moving average to be pierced and the 3330-3332s support to be tested.
The ESZ20 is still in a strong uptrend and the 5-day pullback is not significant yet. A fall through the 3200s area would change the trend to bearish.
Below is a snap of the ESZ20 daily chart with the above support and resistance numbers marked for reference. Thanks again for reading. For more information on how DTG can help your trading, visit us at DiscoveryTradingGroup.com
In the Tradechat Room
There was a 78 point selloff going into the MOC numbers which yet again were non-comittal on the 15:50 reveal. Just no real in or out conviction into the closing.
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It’s Tuesday so we are checking in on our 3 important swing states. All three on a decent rise with North Carolina at their all-time.
For a nation as a whole, we starting our third swing at the bat with our back to school breakout. Deaths have not increased although that uptick at the end is problematic.
To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.
Wear your masks!
Take your Vitamin D!
Chart of the Day
|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3496.50||Opening Print: 3487.25|
|Low: 3470.00||High 3493.75|
|Volume: 180,000||Low: 3410.75|
|ES Settlement 3423.25|
|Total Volume 1.6 M|
S&P 500 RECAP – Trade Date 10/19/ 202
After gapping up and trading in a 26.50 handle overnight range that maintained higher prices, the S&P 500 futures opened Monday’s cash session at 3487.25, up 25.00 handles, and traded to an early high of 3493.75 before reversing and never looking back. Sell programs pushed the futures down to 3468.75 for an early morning low, then after a bounce to 3484.25 for the midmorning high, sellers once again applied pressure to equities as the ES would continue lower down to 3456.25 for the morning low just before 10:30 CT. The index would trade sideways for the rest of the morning with a late morning high of 3469.25.
During the noon hour, the selling momentum would once again pick up as the benchmark index would push lower to 3442.50 for the early afternoon low, then following a bounce to 3452.25, very heavy sell programs at 1:30 lasting into late in the session would take the S&Ps down to the daily low of 3410.75, an 83.00 handle pullback from the morning high.
The ESZ20 settled the day at 3423.25, down 39.00 handles or -1.13% on moderate volume of 1.6 million contracts. In terms of price action, it was all about selling the early pop, and then continuing to sell every modest rally throughout the day.
Pelosi and Mnuchin Edged Closer To Stimulus Deal
Sometimes it takes a while to get things done in the government and clearly, the negotiations on the second round of stimulus is a good example of that. I know both sides want to take credit for ‘the deal’ but when people are hurting financially politics should be set aside for the ‘good of the people’. Yesterday it was reported that Pelosi and Mnuchin edged closer to ironing out some of the remaining policy differences holding up a sweeping coronavirus relief deal before the democratic deadline set for tonight. I am not going to do a big view tonight. In the on/ off world of trading the S&P futures I think yesterday’s view was one of my better calls in a while so my feeling is ‘less is better’
Our view, I think it’s fair to say that there is a lot of risk-on/risk-off trade going on right now. When the ES sells off they look terrible. When the ES goes up they look great but behind the scenes, there is an awfully big mess going on and it’s called the US presidential election. As I have always said, the stock market hates uncertainty and there seems to be an abundance of that right now and it’s not going away anytime soon. Our lean is that we can not rule out a Turn-Around Tuesday. If the ES gaps lower on the open I want to buy it and hold it. If the ES gaps higher I think it could be an early sale but with the stimulus talks sounding a bit more positive, there could be some short term ‘pop’. Will the stock market see a sustained rally if a deal gets done? I’m not real sure of that because the election ‘ups and downs’ are far from over.
Market Vitals Technical Analysis
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