I trust all had a good Mother’s Day. I was fortunate to enjoy my Mother’s Day with my mother. I called my sister and we talked as she opened her gifts. Now, I got her a floor steam cleaner. It’s a gift that keeps giving… Then I hedged it with a dozen red roses. Which do you think she liked the best? (we were having a great time so I turned off the computer)
Yea! I was going to send out an email to the subscribers of The AM Turn newsletter, talking about how you’re going to see the “F” man getting taken down with the origins of the virus. And if you saw it, Rand Paul tore into him Monday. What did the POTUS do Thursday? Lighten the blow? A snake in a bat cave? And a monkey was involved? And all good Americans wore a mask made in China for the last year…
So, help me understand this. In Colorado I can walk to the store whilst not wearing a mask, but once I enter the store, I Must Wear a MASK? The last year and a half defies all logic…
Last Friday’s bulge over Globex did what bulges do. The insiders knew that the jig was up. Do you think Elon went short before he did Saturday Night Live? And now they are worried about minting bitcoin for coal? (yea it was a hustle)
A new bitcoin was introduced and it already has a market cap of 37 Billion. Just at the end of the week? Do you have any idea how large that is? Last Saturday the bitcoin weekly circulation exceeded the US Dollar… Check out the cover of the Economist magazine the “Gov Coin”. This is not going away, big players are entering in…
If you got on board the market Thursday, you had a great ride. It was an ideal S3L day. The clock showed you the way. The last high was mid-pm high. And it did not disappoint. You would have had to stomach the residual bull bulge (see page 4)
Overnight Globex tested the previous days low and found a bid off the spring. As 9:00 turned the corner, price was trading around the 4073 handle. As the opening print printed, price was on a tear to the upside. The first buying wave lasted 10 minutes and extended price 21 points. A 10-minute, 8-point reaction indicated the path of least resistance would favor the bulls.
A 20-minute, 14-point buying wave was met with a 15-minute, 9-point selling wave. This gave the trader the indication the trend may be turning due to the 5 minutes more in duration and a point more reaction. If the trader was looking to get short, the next buying wave should signal the up move reaching for highs.
A 10-minute, 14-point bulge gave the trader the opportunity to short the market. (See chart above). If the trader was trading for the immediate swings and during just the AM TRADE; the ideal exit would have been the halfway retracement to 4098 as the first lunch low printed just 3 points below the projected exit.
I put out a daily The AM Trade email where we look at the market as if it were through the eyes of the old school 1930s traders. For now, it’s FREE, You’re under no cost or obligation and you can unsubscribe at any time. So click the link below to see how the Barcalounger Traders may have seen the market today!
If you were trading using WB’s Clock the Clock that controls all turns everyday, intraday the MID PM HIGH (where you would have gotten short) was late and strong And if you could have stomached the buying waves the lunch low would have given you a 40 handle run if you understood the WB’s clock..
Looking Forward Friday, May 14, 2021
If you were reading the tape or looking at the DOM, you’d seen a ton of prints the last 10 minutes as price dropped to find a willing buyer. On the time and sales, 200 lots were flashing by. It was a sight and sound to see and hear. I thought, if Artificial Intelligence ever gets to its singularity, humans will not have a chance!
Just after settle closed, price just found a bid and started printing higher highs. As I write, price has held on to the 4127 level. Providing the news gives the all-clear signal, the bulls will need to regain that shelf of distribution from 4134 up to 4148 handle. Proving they can do that you may start to see:
If price nears last Friday’s GLOBEX HIGH, the long-selling combined with the short selling is not sufficient to stop the advance of the market. There is latent buying power that appears to increase on advances. If the news is positive, you may start to see certain stocks up to new highs in order to encourage this outside buying power.
This strength spreading to other issues and the market goes on through the old high for the averages. Many bears may discover their judgement was in error and begin to cover, or else their stops are caught. Late bulls who have been holding back come in and buy. The bull procession may broaden. There could be more buyers in a greater number of stocks and there is a larger volume of trading throughout the market.
Why do I say that? Happy days are here again. Ding dong the wearing of the mask could/will soon be over. That is unless they find some other reason to keep us down… That’s where you get those roaring decades!
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 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.
If you are reading this and are not a subscriber, now would be a great time for you to subscribe. Click the red button below to SUBSCRIBE to the AM TURN NEWSLETTER.
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.
SpyGate is now available free to members of IMPRO and MIM trading room. Join the MiM.
The annual inflation rate in the US soared to 4.2% in April of 2021 from 2.6% in March and well above market forecasts of 3.6%. It is the highest reading since September of 2008, amid a surge in demand as the economy reopens, soaring commodity prices, supply constraints. There is also a base effect weighing as the coronavirus pandemic dented economic activity bringing the inflation rate to 0.3% in April 2020. The biggest increases were recorded for gasoline (49.6% vs 22.5% in March), fuel oil (37.3% vs 20.2%) and used cars and trucks (21% vs 9.4%). Inflation also accelerated for shelter (2.1% vs 1.7%) and new vehicles (2% vs 1.5%) and rebounded for apparel (1.9% vs -2.5%), but slowed for medical care services (2.2% vs 2.7%) and food (2.4% vs 3.5%). Meanwhile, compared to March, prices rose 0.8%, the most since 2009 while monthly core consumer inflation increased 0.9%, the most since 1996. source: U.S. Bureau of Labor Statistics
S&P 500 Futures Rally 95 Points in 13 Hours
The S&P futures traded down to 4029.25, down almost 23 points on Globex Wednesday night, and traded 4073.75 on the 9:30 ET futures open. By 11:00 am it had rallied up to 4123.25, 50 points off the open. What a way to start the morning.
After the high, the ES sold off 41 handles down to the 4082 area and then rallied another 45 to the upside and made new highs. At 3:34 the MIM showed over $200 million to buy, flipped to $700 million to sell and the ES sold off 25 points. There were hundreds if not thousands of points up and down in between. I said in the MrTopStep chat that the BOTs are making up 99% of the volume and the people actually trading it make up 1% of the volume.
So why did the markets rally so much? There were a few reasons.
Everyone was off base and were short
The same option positions that were rolled lower on Wednesday’s late day margin calls were forced to roll higher
The same bots that sold it over the last few days started searching for upside buy stops.
In terms of the overall tone for the ES, it was a face-ripping rally. In terms of the day’s overall volume, it was high at 2.35 million futures traded. That’s roughly in line with the last few days, but it was still a bit higher.
Our view: I do not pretend to fully understand it but I really believe that when the markets fall like over the previous three days, investors that hold options are forced to roll lower as the markets fall. Additionally, the big investment firms add hedges. What it all adds up to is the ‘crowd’ gets short at low prices and when the short covering starts and the futures start to rally hard the same people that rolled lower are forced to start rolling higher and the algos exploit the shorts.
I really can’t say for sure what the markets are going to do today but my best guess is some type of early day pull-back and then a RIP. The average 3-day range of the #ES is 41.3 points, the 5-day average range is 40.45 and the 7-day is 35.6 points. Let’s keep the longs but let’s also pay attention to what the NQ is going after 3:00, it can spoil an NHOTC party fast! If I’m right we should see 4140+. And lastly, remember the ES rallied 95 points in less than 13 hrs… expect the unexpected !!!
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