Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 1 (CD1): Normal for a CD1 is for a decline, which did not happen this cycle. Three days of tight consolidation and range compression lead to a powerful breakout and continuation trend day, fulfilling 3 Day Cycle Price Objective (3651.25). Range was 64.75 handles on 1.238M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Cycle price objectives have been fulfilled…As well as a new All-Time High. Whoo Hoo! As such, there are two estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 3640, initially targets 3651 – 3658 zone.
2.) Price sustains an offer below 3640, initially targets 3530 – 3525 zone.
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 2 (CD2)
Thanks for reading,
Polaris Trading Group
In the Tradechat Room
A small sell on a very choppy close yesterday. Price was pushed down into the 15:50 reveal but the lack of unbalanced MOC trading saw the market return to its chop zone.
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The UK is starting to discuss opening back up as their daily new cases and infection rate drop from the current mitigation. Their wave 2 shows 5x more cases compared to wave 1 with about 50% fewer deaths. We are improving in finding cases, protecting the vulnerable, and treating the infected. The next few weeks are critical for producing a coexist strategy as we await wider distribution of the vaccine. What we don’t want to happen is COVID complacency as we start to distribute the vaccine.
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Chart of the Day
GMTT – Chart of the Day – Silver – Nov 25, 2020
It might be a little early, but it seems that Silver bottomed.
We suggest a long position with a buy stop at 22.90.
First upside target 25.20.
Yesterday we discussed Gold on our chart of the day.
It continued to crush during the day and the low so far on DEC Gold was 1798.
We expect to see a bounce towards 1900 in the near-term, but there is also a short-term downside target of 1789.
How can you make use of this information?
Let us explain: It really depends on the way you trade how to go into this trade.
You can either go long at the market with a sell stop at 1789.
The alternative is to wait to see if Gold reaches 1789 and then hit the buy button.
However, Gold might have bottomed already and then you might miss part of the bounce.
We add that Gold (DEC) confirms higher targets on an intraday close above 1832.
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|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3607.75||Opening Print: 3602.50|
|Low: 3575.25||High 3638.75|
|Volume: 140K||Low: 3593.25|
|ES Settlement 3633.50|
|Total Volume 1.23M|
S&P 500 Futures Recap – November 24
S&P 500 Futures: Best Day Since November 5th
After trading in a 32.50 handle overnight range, the S&P 500 futures opened Tuesday’s cash session at 3602.50, up 26.50 handles, and traded to the daily low in the first fifteen minutes at 3593.25. From there, the ES would reverse and bid higher, eventually printing the morning high of 3635.75 just before 11:00 CT. For the rest of the morning, the S&Ps would trade sideways before running up to a high of 3638.75 just after 12:30.
The remainder of the afternoon would see range-bound trading, making an afternoon low of 3623.50 before settling at 3633.50, up 57.50 handles or +1.61% on total volume of a low 1.2 million. In terms of price action, it was all about buying the low in the opening minutes and then holding on into the early afternoon high.
Dow 30k And Nowhere To Go But Stocks
Monday, high probability up day. Tuesday, historically higher. If Tuesday closed higher, Wednesday (today) is usually up. It sounds pretty silly but there are clearly seasonalities at work that help determine direction and the last few days have been right on. Yesterday the Dow Jones Industrial Average (DJIA) closed above 30,000. It’s a huge milestone for sure but what do you think is really driving the markets higher? Is it the COVID19 vaccine? Is it the change of guard at the White House? Surely the markets are not rallying because of the expected tax hikes. So what is the reason for the big rip/new highs? I think it’s pretty simple. It’s called zero rates. Pretty much free money and when the idiots in the government get their act together and get a stimulus bill done stocks will fly even higher. It’s 7:56 pm ET and the ES has traded up to 3655. Every night on Globex the index markets press higher. Many believe it’s a better trade during the night session but I stay up 24 hours a day.
Our view, I still think higher prices but two things 1) the ES, YM and NQ have gone a long way in just a few days and 2) the PitBull said something interesting, ‘many of the stocks I chart have not made new highs’. I’m happy, I got out of my 3555.00 at 3629.50 and my thinking was then and still is that there has to be a pullback but so far that has not happened. Our lean, if you follow the pattern you’re supposed to sell the higher open, cover on the pullback, and look for a midmorning low, say around 10:30ish ET and try to hold. Always remember, we are not here to fight city hall if the markets are going up… we want to go for the ride.
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.