Market Review
Wednesday, price pushed hard to close strong. Over Globex after pushing a bit higher, price quickly erased all gains back down to the 3905 level. That was not good for the bulls. The narrative is that the bonds are getting stronger and more attractive than the Cash and Emini futures and Internet/Technology sector.
As I’ve discussed the last two weeks in Friday’s Opening Print, I was seeing weakness in the market and the bigger players were getting out of some trades. Yesterday they showed their hand. Perhaps the Durable Goods Orders & GDP & Jobless Claims at 8:30, Pending Home Sales Index at 10:00, EIA Natural Gas Report at 10:30 helped move that needle?
Price should have gapped up on that strong move after the previous day’s 3920 close but it opened 13 handles lower at 3907 and started a near ten-minute bulge to trap as many late to the party bulls just short of the high and close of the previous day. A 15-handle 7-minute run to bid price upon a bulge. The old-timers were selling on the opening print but bigger players were feeling weakness around the groups and quickly bid up the price to give it a sudden spurt so they could reduce their line and provide purchasing power around the low (the lunch low of WB’s clock).
You can see this evidenced in the FANG’S aapl and fb, Brokerage gs, Insurance pru, just to name a few. With the exception of the Semiconductors, Aerospace showed the greatest weakness. BA and RTX quickly hit the bid.
Diversified mmm gave the rally to the 10:30 halfback if you were looking to get short and the reason why that was it. After the opening balance was sealed, price retreated down to find the first low of the day. After 33 minutes a bid was found and 13 minutes later traders found supply more effectual than the demand as prices started to slide.
I made a quick video to show my subscribers to the AM TURN. If you’d like to see it just click below.
WB’s Emini Clock S2L Flipped to S2H Turn by Turn for February 25, 2021 (45 min)
https://my.demio.com/ref/lm2FzGfGRaQfv9c9
The second rally stopped just short of the 10:10 a.m. low with recovering over half (62 percent of the loss). Which showed some promise, but once again supply took over and 111 minutes later the first low of day was found. An 82-minute recovery gained back 62 percent of the loss and price closed finding the low of day at 15:39 marker 3810 handle.
Look at the volume and you’ll see twice the normal volume at 2.490,126 lots. Ten minutes later half of the loss was recovered and price closed strong off the lows at 3826 handle.
Looking Forward Friday, February 26, 2021
With the volume twice the norm, we have a potential selling climax. If not, it could be potential preliminary support. It’s all a potential until it’s not. In the above chart I used SPY instead of the Emini cause it was too large a drop to fit on the screen.
Overnight Globex has dipped to find a lower 3805 and then a 3801 low. Will it hold? Price is not buoyant. Wyckoff had nine buying and selling tests and we are not even getting close. News for tomorrow on tap is:
Personal Income at 8:30, Chicago PMI at 9:45, and Consumer Sentiment at 10:00 EST
Let’s see what happens when the Boy’s get off their Helipads at 8:30 and see if they tip their hand with volume and price getting active on the tape. If we lose the big 3800 even it could open the door for further downside activity.
As I write, price is trading 3817, if traders start hitting the bid you could see a spring down to 3792, 3782, 3774 handle. That would be a #1 and #1 spring. If it’s a #3 spring . . . then Katy bar the door, it could get interesting today!
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: 36 Monday, 1 point, Tuesday, 4 points Wednesday, and 16 points Thursday. Total for the week 57 points, which would be $2,850 on 1 lot and $8,550 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 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
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In the Tradechat Room
MiM & SpyGate
Early MIM signaled a buy and an entry there was worth 20 points, but you had to be nimble and get out. After such a bid down day usually the ETFs have to balance out and create a negative MOC. That was suprisingly not the cas as we came out farily even. like yesterday’s price movement was a non-event. The MOO this am will be another tell has the negative gap evaporates.
Questions? Please email me: Marlin@mrtopstep.com
LAST CHANCE TO JOIN THE MIM AT 2020 PRICES. We need to raise our subscriptions prices for 2021 to cover the increased data fees. Why do internet and computers get cheaper and cheaper but data more expensive? To be grandfathered in for 2021 you need to purchase by the end of the month which is this Sunday! Don’t miss out.
Get the skinny when we get it: Join the MiM.
Covid Corner:
As a whole, the US continues to improve in dropping daily cases.
The all-green US map is starting to get some red spots. We are seeing some early turns for what might be a new wave in CT,MI, LA and WY as we pointed out the other day,
Another warning is the upturn in tests being done.
Wear your masks!
Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line)
Stay home!
Take your Vitamin D!
Chart of the Day
The US Dollar is whipsawing higher in turn as USD price action strengthens aggressively across the board. EUR/USD has plummeted over 80-pips from intraday highs and completely erased gains from earlier in the session. GBP/USD and AUD/USD have both been hemorrhaging as well with the Pound and Aussie down 110-pips and 76-pips respectively against the US Dollar.
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3934.50 | Opening Print: 3907.25 |
| Low: 3903.25 | High 3921.75 |
| Volume: 310K | Low: 3810.25 |
| ES Settlement 3831.50 | |
| Total Volume 2.8M |
S&P 500 Futures Recap – Trade Date February 25, 2021
S&P 500 Futures: NQ Now Negative For 2021 After Biggest Loss Since September
After trading in a 31.25-handle overnight range, the S&P 500 futures opened Thursday’s regular session at 3907.25, traded to the daily high of 3921.75 in the first fifteen minutes, and then reversed to sell off thru the morning, pushing down to 3829.75. The noon hour saw a new low print at 3820.25 before an early afternoon rally pushed the index futures up to 69.25 at 1:30 CT. However, late in the day sellers re-entered the market, pushing the S&Ps to the daily low of 3810.25, a 111.50-handle reversal from the morning high. The index would rally to settle at 3831.50, down 95.00 handles on huge volume totalling 2.8 million contracts traded. In terms of price action, it was all about selling the early high, adding on bounces throughout the day, and covering late in the session.
In the end, it was the worst day for the S&P 500 in February, and the worst for the recently leading small-cap Russell 2000 since June of last year. Meanwhile, the tech outflow continued as the Nasdaq closed in negative territory for the year, just beneath the key 12,900 level we mentioned earlier this week.
Our View
Altered States
It’s been a long, rough week of trading and it’s not over. The non-stop selling in the bond market and rising yields has weighed on the markets all week, every rally has been a ‘dead cat bounce’. The Nasdaq is at a four-week low and it’s coming off its worst month since October. The and S&P is at the lowest since February 2 and the Dow Jones is at its lowest since February 9, but still up for 4.7% for the month. 10-year yield under 1.50% rose above 1.60% yesterday.
Our view, the Asian markets closed sharply lower. Europe is down across the board. Bitcoin is down, metals are down, grains are down, crude is down. The markets look horrible but it’s Friday and it’s the last trading day of February. Our lean is to go slow. There is a good chance the ES bounces today, the question is will it hold?
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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