If you haven’t noticed the world is changing. I mentioned a few weeks ago they were going to disclose some UFO videos and tonight they released them on Fox. They look like ours, but who knows. They talked about packing the court. And now, some of my friends are starting to tell me they are starting to see 5G light poles pop up around their neighborhood. Yes, the times they are a-changing.
Oh, don’t get me started on Bitcoin and the potential of losing the peg of the US Dollar to China and Russia… If we keep spending these trillions of dollars that our grandchildren will have to pay for… One thing that hasn’t changed is the way the Old Timers saw the market. Yes, it was slower then and less volatile, but we don’t really know, do we?
This will be a little different than what you have seen before. This is along the style of trading the Barka Lounger Boys traded in the 1930s. This is the market from yesterday. I put out a daily email called The AM Trade, where I outline how a trader may have seen the current market day Using the Principles of Wyckoff and the Eyes of WB.
This is an excerpt from that email:
The day starts out at 4142 on 16,000 lots. The advance continues straight up to 4147 without a single point reaction. The reaction recorded by 4,000 marks for the present, the boundary line of 5 points for the day.
Just under the half-way reactions 4,000 at 4144; 12,000 at 4145; and then 7,000 at 4146 are taken.
If they wanted to sell they would have put it up. They did not, they took just under what was offered depressing the price. 3,000 at 4145 and then 5,000 at 4142. Less volume on the retest of opening print of 16,000 lots.
Here is the indication that the professionals are trying to buy and not sell. The trader forms a tentatively bullish attitude and waits for the market to confirm, cancel or reverse it. Next a rally of 7,000 at 4143 then 1,000 at 4144. A 2 point reaction. Then a 3 point move 3,000 at 4145. A dip down to 4143. A move up to 3,000 at 4143.
Then a return 4,000 at 4143. Activity is low. Across the page horizontally we see a potential 30-minute base of accumulation totaling 21,000 lots. A dip down to 4,000 at 4143. A second return to 1,000 at 4144. Then a dip down 5,000 at 4143; and then 6,000 at 4142, confirms our notion of a bullish move is pending in the near offing events.
The move down might be called by the old School Traders “Bag Holding.” there’s is more if you want more, just
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Now, here in 2021, on your chart around 10:10, price took out the supply line and found the Morning high around the 11:00 marker. The move up was 53 minutes and gained 17 points. The reaction lasted 38 minutes and gave up only 10 points of the previous rally. This emboldened the bulls.
The pullback blurred the support line but by PEON close price found a bid and it was back to chasing the high of day again. By 1:00 marker, price started to drift down to the 5/8 retracement, found its bid, and closed strong to end the day.
Currently, in GLOBEX we’ve pulled off just to test the low of the last rally in the last hour of trade.
Looking Forward Friday, April 16, 2021
News today is Housing Starts and Permits at 8:30 & Consumer Sentiment at 10:00. It’s earning season and nothing but hope and optimism has been fueling this market. We’ve been going up on little to no volume. What could go wrong with that?
The market seems to have gotten accustomed to the T bills trading around 1.66%. Why I’m not sure. I’m not seeing any concentrated informed professionals entering into the fray. Yesterday I saw four and that was it!
The biggest player I can find is: Coca-Cola Earnings KO, I’ll leave it at that. It’s the end of the cycle and the end of the week. It’s S4H day. WB would have called at a “Debbie Day”, You got three doors, Two to shut and one to keep open. You could see a move from the low to high in the morning or afternoon trade.
Book square and Scare da bulls, say’s a distant voice from the past!
I give you the best of the old school market technicians, JP Morgan, Herriman, Kearn, and Livermore. The traders of the 1930s. How they may have seen the market. I use the lens of Richard D. Wyckoff Principles and Procedures and through the eyes of WB’s hidden internal clock. The clock that controls all turns intraday every day.
We had a good week this week. Our subscribers have been very lucky with the levels given: 10 points Monday, 11 points Tuesday, 24 points Wednesday, and 10 points Thursday. Total for the week 55 points, which would be $2,750 on 1 lot and $8,250 on 3 lots. That’s due to the volatility that crept back into the market. I’ll be the first to say, it does NOT happen every week. When it does it’s a beautiful thing!
I consider myself fortunate to be able to keep WB’s Memory and Trading Legacy alive today. For traders now and in the future who will benefit from his savvy wisdom and trading techniques. I really do feel that the clock can separate you from where you are now to where you want to be. But, it’s is NOT EASY TO LEARN!!!
Most folks/traders who subscribe and never contact me fall by the waist side. And some who I’m still friends with still can’t’ get it! It’s not easy. But it’s worth the effort.
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 firstname.lastname@example.org 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.
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Chart of the Day
GMTT / Chart of the Day / Bitcoin (BTC/USD) / April 16, 2021
Bitcoin traded this week relatively speaking in a tight range and is looking for direction. This morning BTC/USD reached our first downside target of 61375 – the next target down is 60400. A good close Below BTC/USD 60400 elects a sell signal with a projected downside target of 58900. A good close above 63700 is needed to confirm the next key resistance level which is projected around 70k!!
The range for today is: 60400 – 63700.
Have a successful day and a nice weekend!
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Dow 34,000 and S&P 4,166 — The Gift That Keeps Giving
I am always a bull, but I have been really pushing it since President Biden started pushing trillions of dollars in Covid-19 relief and his infrastructure stimulus. Democrats are trying to jumpstart the economy by spending trillions of dollars and the stock market has reacted in kind. Since President Biden took office, the S&P has gained 9.9% as of Thursday’s close and is up about 5% in the first 12 trading sessions of April.
Below is the copy of a tweet that was sent to me by a @MrTopStep long-term follower:
Danny…I’m really one of your biggest fans….But be careful with these one-sided calls after the steepest rally in history…you called in a uniform manner exactly 14 months ago at 3370 for 3420… 4 weeks later 2300…Just saying…NOTHING IS FOR FREE IN THE LONG RUN…
There is a ton of sense in what @ESNQ4 has to say. There have been some 30% and even 40% shakeouts, but they tend to recover quickly. That said, with improving economic data, strong bank earnings (Citigroup posted a profit of $7.9 billion) and U.S treasury yields saw their biggest one-day drop since November, stocks had no place to go but up.
However, the main driver of the current run is the record liquidity provided by the government stimulus programs. This has created the chemistry for a “perfect storm” to the upside.
I remember how the S&P swayed as the Fed initiated QE1 and how the S&P started to rally and continued to rally as more QE was added. At least in my humble view, this is the exact same price action we are seeing today. For a bull, I am not sure there is much more that you could ask for.
In the end, the S&P traded up to another new all-time high at 4,164 — its 22nd new high of the year — and the Dow Jones closed above 34,000 for the first time ever. In terms of the ES’s overall tone, it was firm from the open to the close. Regarding the day’s overall trade, volume was steady, but I would not call it high volume with just 1.234 million contracts changing hands.
Our View: Goldman, JPMorgan and CitiGroup reported record earnings, Bank of America doubled its profits, and Delta Airlines say demand for travel is improving. Further, retail sales jumped 9.8% last month, fresh data shows unemployment benefits saw a sharp decrease and the yield on the benchmark 10-year U.S. Treasury note dropped to 1.531% (from 1.637%) on Wednesday. Thus far, April has lived up to its bullish history with the S&P up 5% and the Dow up 3.4% so far this month. Our lean: there is no doubt in my mind that there will be a sell-off, but until then I am going to continue buying the pullbacks. In the near term, I see 4,170, 4,210, and then 4,260. I’m sure there will be some good pullbacks along the way.
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