Market Review
Are we there yet?
That might just be the question in most trader’s minds. Are we there yet. Is the market high enough?
Looking at the monthly, you may see one time framing. As JDalton said on his webinar yesterday. I’m surprised the man was still around. He’s taken market profile to the highest level. It’s actually a tape reading chart for the 20th century. The old timers did exactly that and more using the Trans Lux and grid paper. Of course, the market moved a little bit differently back then…
On the monthly and weekly, one timing. On the daily some disturbance in the force. By my eye, Wednesday trade was foreshadowed in Globex. The open drive was quick and aggressive. Thursday the same.
They had to have the big 4,000 as near the opening print on the first day of April. The big squares did it they say. The Fangs. The other small squares, not so much…
In the PROSE and THE NUMBAHS on April 1, I gave my subscribers:
By my eye, I saw heavy bag holdign at the 3968/67 in the middle of the closing print. We had a 5 point pop, then dip in the same minute. Globex tested this level at 19:15 and 20:25 and 23:00 and 0:15 handle. After which, a 10 point rally ensued dipping into the 50% retracement of the RTE CASH range.
News: Jobless Claims at 8:30, PMI Manufacturing Final at 9:45, ISM Manufacturing & Construction Spending at 10:00, EIA Natural Gas Report at 10:30 (all times EST)
Edge: It’s a Thursday. Globex has held the 3967 level and currently taking out offers in it’s way. Infostructure is the catalyst and money is no object. Globex 20 handle trading range on 148 K volume. Bulls: need to retake the 3985 want to take the 4000 handle.
Bears: need to retake the 3956, want to take the 3942 handle. Cycle Bias: Favored to moves of the bull (it could flip). Visual: Expect movement first and last hour.
Shape of the day: After the PEON open GLOBEX is on a tear to recover price up to the 15:15 Last hour high. The professions may have checked the rally due to end of month or were selling.
The inability to resume the decline after a normal correction indicates weakness. And the quick up thrust to catch SHORTS with the brief duration of the rally to a third lower top implies increasing weakness. Which of course returned price from which it came
If the bulls are able to bring it, that level may be a force to be reckoned with.
Honing: Spill 79% Down / 21% Up, loupie loop, LAST HOUR 68% Up / 32% Down.
Big picture: Potential additional $3 to $7T funding. Border Wall Fiasco, HR-1 / S-1 voter Bill. Amendment #2.
Yes I think we got that. Don’t you? With the 10a movement Wednesday, we got the 21% outcome on the spill and the 68% on the last hour. Price should have moved down to keep the market healthy, after the S4H day. It did not. I had two levels yesterday 3990 and 4000 handle. I got a few points off each. The VIX was around 18 / 17 and falling. As price just grinded on to higher highs.
The answer to “Are we there yet?” Not yet, we’re getting close. Are we long in the tooth? Perhaps. The answer might be; “almost right.” Not wrong but not right. The bonds are not trading today. You have nothing to lean against and the jobs number is released with the market at all time highs.
It could go either way with one by one and two by twos. The last level I had was 4010 where to you think that printed? The closing print. The clock knew. The clock showed the way. It was a S1H day. Yes, some traders did not agree. WB knew.
Looking Forward Friday, April 2, 2021
If WB was alive today he might say. And I must warn you he was not PC (politically correct). As my friend from the United Kingdom and I talked about late Wednesday night.
I’m giving away free lobotomonies to any one who wants to trade today. Yea, that’s WB!
So we got jobs number being released and the bonds are closed. If you’ve had a good week you might want to enjoy sitting this one out.
The news says on “BING”
Lawyers for George Floyd’s Family Say Jurors Should Look Past Drug Use and Judge Blocks All Sales of Lil Nas X’s Controversial ‘Satan Shoes’ After Nike Files Lawsuit.
WB / TEPID to those who knew him in 2006 and earlier would have a field day talking about that!
Globex has jammed price up to 4021 handle. WB would say; The PEONS are over their skis. Can price go higher? Can price go lower. Understand on little to no volume they have taken price higher. Twenty handles higher. That’s the range of a normal summer day…
And what was the fundamental reason? Infrastructure spending $2T to $T or more. This can not long continue.
Have a safe and happy holiday.
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 trader@wyckoffamtrader.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
Economic Calendar
Chart of the Day
Discovery Inc.’s share prices are more disconnected from each other than usual after the cable-channel owner was battered by the unwinding of trades tied to Archegos Capital Management. Discovery’s voting Class A stock cost 18% more than its non-voting Class C stock at Wednesday’s close, according to data compiled by Bloomberg. The premium was more than twice the average since August 2014, when Class C joined Class A in the S&P 500 Index. Super-voting Class B shares closed 195% higher than Class A, more than 12 times their historical premium, after surging 83% Wednesday.
Our View
S&P 500 New All-Time Contract Highs #4017
The Biden stimulus-filled markets have pushed the S&P 500 futures (ESM21:CME) to new all-time contract highs. There are all sorts of negative forces at work but with the Fed keeping rates low (despite inflation rising) and unheard-of national debt, the trillions of dollars in the Covod19 stimulus programs and trillions of more dollars earmarked (could be over $5 trillion) are starting to flood the markets with liquidity. There is a notion by the government that the big spending will jump-start the economy, put people back to work at higher wages. The Biden stock market rally has started. How far will it push the S&P up? 4200? 4400? I do my best not to project sharply higher prices after a record run because just like at the recent lows, there was not a bull to be found and at high highs there are few if any bears. This is how people get caught with their pants down. Too long into the highs and in comes the pullback. I do think we could be entering another period like the QE’s where you’re supposed to buy every dip but like I said above, baby steps.
Good Friday
Our view, the lower volumes over the last three days has favored the upside. It really feels like people are still on ‘spring break’ Our lean, I am still long and if the ES gets up to 4028-4030 I am going to exit the position. I can’t rule out another push higher but I think the odds favor a 20 to 30 handle pullback That would serve two purposes, shake out some weak longs and then bring the dip buyers back in. I think the best advice is to go slow. The VIX made a low at 17.29 and settled at 17.33, down 2.7 points or -10.67%. Our lean, buy the pullbacks with tight stops.
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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