Market Review

Taylor 3 Day Cycle

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

Tuesday’s Session was Cycle Day 2 (CD2): True to form for Cycle Day 2, price oscillated back n forth and tested the CD1 Low for surety. Range was 34.75 handles on 1.567M contracts exchanged.

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): As long as price opens above CD1 Low, then Positive 3 Day Cycle Statistic is fulfilled. There does remain further upside potential should the bulls convert 3950 to solid support. As such, there are two estimated scenarios to consider for today’s trading.

1.) Price sustains a bid above 3950, initially targets 3970 – 3975 zone.

2.) Price sustains an offer below 3950, initially targets 3930 – 3925 zone.

*****3 Day Cycle has a 91% probability of fulfilling Positive Statistic 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 3 (CD3)

Thanks for reading,

PTGDavid
Polaris Trading Group


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Chart of the Day

GMTT / Chart of the Day / Lumber / March 31, 2021

LUMBER (MAY)

This following was published by Bloomberg on March 11, 2021:

Soaring lumber prices and chronic shortages are prompting key U.S. housing industry participants to call on the Biden administration to find remedies that’ll boost wood production.

Thirty-seven organizations are calling for the “immediate attention” of U.S. Department of Commerce Secretary Gina Raimondo to address “skyrocketing” lumber prices and supply constraints they say endanger economic recovery and housing affordability.
Soaring prices for wood have lifted the average price of a new single-family home in the U.S. by more than $24,000 since April, according to the National Association of Home Builders.

At GMTT we took a closer look and technically speaking there is a projected high which would result in a pullback.
The Lumber price is overbought and as the Bloomberg article points out it is asking for intervention.
Would be interesting to see if the intervention will come in the next day’s right at the projected high.
A close below 959 gives a sell signal.

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Our View

Worried About Biden’s Tax Plan? You Should Be 

More selling hit the futures index markets yesterday as the blow out from the hedge fund Archegos as the shares started hitting the banks. Shares of Credit Suisse fell another 2%, down 10% year to date. Between higher rates, the end of the quarter rebalance and the hedge fund stock liquidation it’s been a rough ride for a lot of people’s stocks getting hammered over the last few months but they may be about to get rougher; the Biden Tax Cuts! Below are some excerpts from BigFoot in the MrTopStep chatroom and it’s something the PitBull has warned could be  ‘very bad’ for stocks. President Biden plans for ‘long term federal spending’ claiming it’s the largest share of the US economy and wants to pay for the program by charging the highest-earning Americans the largest tax increase in many years. The plan calls for pushing banks to lend more, underwriting education and pushing for higher-paying jobs. The idea is that the government can become the main driver of growth while at the same time federal debt is reaching levels not seen since WWII. In all honesty, I am not smart enough to figure all this out and these are just a few of the changes.  

#BigFoot : Nobody Worried About the $3 Trillion Tax Increase?

MIM: bigfoot :(2:36:02 PM) : It’s interesting that nobody on here is worried that a $3 TRILLION tax increase will affect the market. I’m so old that I can remember taxes going up on corp profits, capital gains, personal income and it was not pleasant

MIM: bigfoot :(2:39:03 PM) : Anybody with big unrealized long term capital gains would we crazy not to be selling ahead of the proposed elimination of favorable taxes for LTCG

MIM: bigfoot :(2:39:55 PM) : Hedge funds will shut down if carried interest goes away

MIM: bigfoot :(2:42:47 PM) : Agreed! But they’ll take the money and literally run…. to another country to avoid paying ordinary income tax on there fees and % of gains

MIM: bigfoot :(2:55:41 PM) : case: dream on – taxes will be going up substantially but yes it’s impossible to know all the details of what the tax bill will look like. Raising taxes allows democrats to use budget reconciliation and pass anything 51-50 in the senate. But they only get 1 more time to use that tactic until the 2022 election and a new congress. Seems unlikely they’ll continue to control both chambers then so that’s why they are talking BIG

Our view, I think 80% of the rebalance is done but the remaining 20% is the wild card. According to the Stock Trader’s Almanac, the last trading day of March has the Dow down 18 of the last 30 occasions and the first trading day of April has the Dow and S&P up 18 of the last 25 occasions. Historically April is the best month for the Dow with an average gain of 1.9% since 1950. Look at the chart, the ES has been back and filling and has made higher lows the last 2 sessions. Our lean is the same thing; sell the early rallies and buy the pullbacks. If the ES closes higher tomorrow the run to new highs is on. 

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






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