Market Review GLOBEX (ESH20:CME) GLOBEX Session(ESH20:CME) Day Session High 3853.25Opening Print: 3826.25Low: 3830.00High 3852.00Volume: 185,000Low: 3788.50ES Settlement 3847.50Total Volume 1.7 M S&P 500 futures Recap - trade Date January 26, 2021 Micro Flash Crash After trading in a 23.25-handle overnight range, the S&P 500 futures opened Monday’s cash session at 3841.00 then traded to an early morning daily high of 3852.00 just after 9:00 CT and reversed to sell down to the daily low of 3788.50 just after 10:00 in a 63.50-handle reversal. From there, buyers came in pushing the index futures higher for the rest of the morning into the noon hour making a midday high of 3843.00 just before 12:30. The afternoon saw sideways price action down to 3828.50 just after 2:00 before heavy buying came in the final half-hour pushing the index up to 3851.50 before settling at 3847.50, up 13.25 handles on a solid volume of 1.7 million contracts. In terms of price action, it was all about selling the first hour high and then buying the midmorning low holding into late day. Economic Calendar Closing Prices In the Tradechat Room MiM MiM built a solid early sell going into the closing candels but price afer some instability just after 15:00 was solidily suggesting the MOC was going to be ignored and it was. The 15:50 reveal was just -600M to the sell side with no real lean and the market topped out a 16+ point run on the ES. A solid close telling us that buy the dips is still in play. Questions? Please email me: Marlin@mrtopstep.com Get the skinny when we get it: Join the MiM. Covid Corner: Top Best Top Worst The US continues to improve nationwide with no states showing rising cases. The US leads the world in the number of vaccines administered Percentage wise, Israel is way ahead with over 30% of their population having a least one jab. The US lags the UK since they have adopted the "one jab is better than no jab" strategy using their second jab inventory to cover more people. The UK's strategy shows up in this chart as 0.7% of the population has recieved full dosage compared to 1% of the US. Israel still leads in the full dosage with 14% of the population fully vaccinated. Johnson & Jonhson are expected to release efficacy data on their single jab vaccine this week, it that is a good number that will be a game changer on our war against the virus and bring another decent size inventory into play. Wear your masks!Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line) Stay home!Take your Vitamin D! Global Macro Technical Thoughts - Jitschak Nager - Where are the trades? This is my view which is not necessarily true, but it is something to think about. Indices making all-time highs, equities are beyond reasonable valuation of actual value. Pumped up by fiscal stimulus and more stimulus programs and spreading false hopes. The cryptos are bubbling higher by the day. Volatile moves of 5-10 % daily are becoming common practice. So, what is still trading in an actual, non-overextended inflated price pattern? We think that is the energy and the grains sector. True that we saw crude trade below zero last year, which we forecasted as such but in disbelief that it would fall that low. However, looking at current trading level and ranges it seems to have recovered from that technical washout as I like to call it. Nat Gas is another example it trades separate from the media hype and traded in a logic a technical way. We have had some very nice trades in Nat Gas in the last twelve month and so too in Crude. Obviously, the grains saw a huge Increase due to its high demand from China and a declining global supply of grain. This pushed corn and soybean prices to unexpected levels. We covered the grains multiple times in the chart of the day, as we still expect to see a significant correction. Here too we generated very nice profits in the Grains which was pure based on the overall technical models that we use. It is a debate if you want to believe in technical analysis. Facts are that under normal circumstances they work well. The last twelve months we have seen that most sectors worked well based on the technical models. A few others that influenced the media hypes, and promising stimulus programs, and the unexpected pandemic rerailed the models slightly/ However, we do see – and wrote about it many times in our GMTT Research Reports – that they do fall back into its technical model. This can be a matter of days or a couple of weeks. So, what to expect next must be coming up as your question. That will be revealed in our three weekly GMTT research report which after signing up gives you a 14 free day trial. Only after the 14-day free trial will you get charged and its free to cancel at any moment. You will get many trading opportunities and even if you are not a trader it will give you a feel at which direction the market is heading. Jitschak Nager GMTT Sign up for a free 14-day free trial: Join Our Newsletter 14 Days Free Chart of The Day Our View #ES 59 Handle Drop In 19 Minutes I told the MrTopStep forum that I expected a sell off when the futures were not far off the highs but what I didn't know there was going to be a ‘ Micro Flash Crash’ That's right the ES got hit by a big early sell program that spun out of control. What I think happened was Investor Intelligence was 62% bulls, the ES was 'extremely’ overbought and after running the buy stops up to 3852 the bots took aim at the downside. I am not 100% sure I can explain this but the algorithmic, high frequency trading and S&P index arbitrage have been running upside programs for months. Remember, the ES traded down to the 2211 level in March last year and traded as high as 3859.75 last week. That's a 1,648.75 handle rally or an average gain of 149.8 handles a month. We have never seen anything like this before. Will the ES keep going up? I think so but I also think there are more big drops on the horizon. Our view, there is a high level of concern about the Biden administration's plan for a third $1.9T stimulus. Last night Asian markets fell the most in two months. Let's face it, the US government can print the money but there is no way it will ever be paid back. I'm not sure if it's in the long or short run but ‘there are reasons to be concerned’ about the longevity of the stock market. Am I getting bearish? No, but I am getting concerned. Our lean is for an early pull back then higher prices. There is a boat load of buy stops above the 3848 to 3852 area and as we all know NO STOPS GO UNTOUCHED!!! 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.