If you’ve been reading this blog for the past few weeks, then you know I’ve been beating the drum regarding professional selling. Here’s just a small snippet from last Friday:
“The market is not buying into it. On a day that should have been for the bulls it was the bears ball. Cash opened in the middle third of the previous day and the bulls were hit hard with selling power. I was hearing 100 lots on my tape reader program at the top and on the way down.
If selling power is the path of least resistance, then the 3884 and then the 3878 might be tested today or over the weekend. The 3868 handle may be in the bear’s sights. That is if we lose the 12:00 marker where buying pressure held the lows. I’m leaning more to the bear side with selling power pushing Fair Value.”
And what happened after the market opened? They ran it to highs. By my eye, that made the market weaker. The low volume in narrow ranges indicated that the buying power was temporarily exhausted. Most of the traders who could be influenced to go in and buy have bought.
A case in point was the RobinHood traders who squeezed the Hedge Funds. The composite man was using that as a ruse to encourage other younger bulls to enter into the fray. And I did note factor in the three-day weekend. With Trump’s outcome not yet concluded…
So what happened Tuesday? Price started moving back down.
And what was the low yesterday? 3880.50 handle at the 10:33 marker. And WB’s clock indicated that the low of day would be around the 10:30 marker. All in your email inbox before the opening bell.
Looking Forward Friday, February 19, 2021
The 3900 big handle seems to be a formidable level to overcome. Tuesday, the bulls attempted a move out of the highs and were quickly met with supply as the day ended near the lows. Wyckoff would have called that a potential terminal upthrust. Thursday, price found the lows of February 10 and some buying met supply and turned price back to the north.
Currently, Globex tested the low of 3890 and found a bid. If we lose the levels given last Friday given above you may see those levels sooner rather than later. That may put the big 3850 in the bears’ sights. The news is consistently the same. Virus counts down and “Free Money” is around the corner. The China holiday has ended and nothing but home sales to move the needle. Including Globex, you see 4 red bars on the Daily chart. If buying pressure comes, provided it is determined to take out the overhanging supply (which would be a feat) expect to see it on increased volume. If not, consider getting short at the top for a quick short ride back down.
We had a good week this week. Our subscribers have been very lucky with the levels given. I would love for you to join us. If you have not taken the time, now would be a great time for you to subscribe. After you subscribe drop me an email at email@example.com we’ll set up a time to talk and help you discover how using WB’s clock can give you the gift of timing that you need in your trading life.
In the Tradechat Room
MiM & SpyGate
While the 15:50 MOC had a decent sized buy, the lean was actually divergent. There were more symbols with sell imbalances than buys. That happens when there are some heaving hitting symbols, in this instance on the sell-side. Here it was the NAZ symbols which were strongly influencing the dollar bias. The geen Naz button shows the effect of the NAZ compared to the other indices and markets.
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Time to check in on vaccinations for the end of the week. We have a new leader in Gibraltar. It is not a huge place but if their data collection is good we should have some early info to confirm what we are seeing in Israel. The USA still leads in the absolute number of vaccinations given but as a percentage, we are chugging along without any real growth, just the same trajectory since we started vaccinating in late 2020.
Only the daily per-capita we see again Gilbraltar hitting a rate of 2.4% with Israel still around 1.5% and the US not quite able to break above 0.5%. At a rate of 1%, it would take at least 100 days to vaccinate 100% of the population.
12% of the US population has now received at least on jab. That means they still have 88% to do at 0.5% ad day will be another 160 days before the population has first jabs done if the decision is made to hold back 2nd jabs, otherwise it will be twice as long.
Both Isreal and Gilbraltar have about 33% of their country full vacinated while the US closes in on 5%. We will be monitroing both Gilbraltar and Israel to see how the mass immunization holds up to new strains and the effect on end the pancemic or at least tamping it down.
Wear your masks!
Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line)
Take your Vitamin D!
Chart of the Day
Gold appears far less precious these days than shares of Apple Inc., Microsoft Corp. and their peers among the biggest Nasdaq-listed companies. Comparing the metal’s price with the value of the Nasdaq 100 Index shows as much. The ratio between them closed Wednesday at the lowest level since February 2001, according to data compiled by Bloomberg. Wednesday’s reading was down 42% from a high set last March, as a bear market in U.S. stocks ended. Preferring gold to the Nasdaq 100 “looks painful,” J.C. Parets, editor of the All Star Charts blog, wrote Wednesday in a Twitter post with a similar chart.
|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3936.00||Opening Print: 3898.75|
|Low: 3893.25||High 3918.50|
|Volume: 190K||Low: 3880.50|
|ES Settlement 3910.00|
|Total Volume 1.5M|
S&P 500 Futures Recap – Trade Date February 18, 2021
S&P 500 Futures: In Jeopardy of a Lower Weekly Close
After trading in a 42.75-handle overnight range, the S&P 500 futures opened Thursday’s cash session at 3898.75, traded to a morning high of 3906.50 during the opening minutes and then sold to the daily low of 3880.50 just after 9:30CT. For the rest of the morning, the S&Ps would chop sideways, albeit making higher highs and higher lows before a wave of noon buying gave equities a boost that lasted throughout the afternoon and into the final hour. Late in the day, the markets did pare back some gains before settling at 3910.00, down 18.00 handles on volume of a solid 1.5 million contracts traded. In terms of price action, it was all about buying the mid-morning low and covering in the final hour of the day. The S&P’s have mostly sputtered over the last eight sessions, but remain higher overall.
ES Closes Above 3910; Welcome to the January Options Expiration
Sometimes it’s hard to see through the forest. The S&P 500 futures (ESH21:CME) has been dropping with the Nasdaq futures (NQH21:CME) leading the way. After Warren Buffet announced he was going to sell part of his Apple (APPL) holding, the NQ has had a very hard time “holding a rally’. The ES starts to uptick then the sellers hammer the NQ.
After settling at 3910.00, the ES sold off down to 3890.25 on Globex last night then rallied up to 3905 at 1:00 am. Today is February options expiration so my guess is we will be higher in the morning. It’s 7:00 am and the ES is trading up 9 handles. Our lean, buy the pullbacks. If I’m right, the ES trades 3950 today.
Danny Riley is a 39-year veteran of the CME trading floor. He ran one of the largest S&P desks on the floor of the CME Group since 1985.
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. Decisions 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.