Market Review
Disclaimer: For educational use only. I’m not dispensing financial advice. We are having an intellectual conversation (you and I) on the topic of trading the Emin futures using the Lens of Wyckoff Principles and the Eyes of WB’s clock. The clock that controls all turns intraday, every day!
Fresh off a near 100 plus point run from yesterday’s low, what’s a late bull to the party going to do? After the open price just kept running. IMPRO: Wyckoff Trader :(10:44:55 AM) : Still selling pressure in FB IMPRO: Wyckoff Trader :(10:47:09 AM) : UNP still selling pressure. IMPRO: Wyckoff Trader :(10:59:34 AM): Buying wave may be exhausted; AM window closed. No MID AM turn, looking for lunch high. And that was pretty much the high. IMPRO: Wyckoff Trader :(2:14:07 PM): DOW futures unable to leave the 34800 gravity well.
Potential pull back to find support but we’ll have to see what the Job’s number has in store for us today. Well as you read this the jobs numbers have been released and price may have already found its way…
I appreciate the new subscribers. Here’s the video link that is more audio:
Wyckoff AM Trader – Wednesday, October 6, 2021
It outlines how old school trend line could have helped you frame your trade. (some of the audio is garbled).
Looking Forward to Friday, October 8, 2021
Price has left the support line and has lost more than halfway of RTE CASH rally. Traders are looking to buy pullbacks and got their eyes on the 4433 handle. The weekly pivot is 4398.
GLOBEX has pulled out of the deep uptrend channel and started a supply line. Losing all the gains from RTE CASH. However, price has started trading sideways and is in a resting spell for accumulation or re-distribution. You could see further retracement down to 4375 down to 4355 or lower.
All eyes are waiting on the jobs number. I trust that price has not already factored in the number…
Offing Events: The debt ceiling was kicked till December. Trillions are waiting voted on. A variant of the virus is on the rise. Delta, Lamba is Gamma next? The country is coming undone at the seams. September / October may just be the catalyst for the truth to be revealed.
When the trend is in WB’s clock is your friend. If you have not subscribed take the jab today. It’s less than a cup of coffee each trading day. What more proof do you need? Click the red button below to SUBSCRIBE to the AM TURN NEWSLETTER.
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Baxter
Baxter is our new AI trading helper. This data is early, new, and not very well tested but we want to share some of our findings. We are concentrating on the SP500 which should benefit ES futures and SPY traders.
Last Trading Day:
High: ~10:20
09:30 – 10:00 38% (wrong)
10:00 – 12:00 50% (right)
Low: ~09:30 (open)
10:00 – 12:00 >90% (wrong)
Today:
High:
09:30 – 10:00 > 90%
Low:
12:00 – 15:30 >90%
Chart of the Day
S&P 500 earnings estimates bring another triumph of hope
When third-quarter earnings reports start arriving next week, U.S. companies will again have to justify analysts’ growing optimism. Projected profit growth for the S&P 500 Index rose 4.6 percentage points during the quarter to 28.3%, according to data compiled by Bloomberg Intelligence. The increase was the fifth in a row, which ranks as the longest streak since 2005, a year after the figures begin. Estimates rose the most for the S&P 500’s commodity-related industry groups last quarter, while they dropped for consumer-oriented companies and utilities.
Our View
The S&P 500 futures (ESZ21:CME) made a low at 4273.25 during Wednesday’s session and rallied over 80 points, settling at 4355.
The ES continued to rally on Globex Wednesday night, climbing toward 4400 and opening Thursday’s regular session at 4388. It rallied up to a high of 4421.75 in the first hour and chopped the rest of the morning and into the early afternoon. The ES pulled back down to the 4409.50 level, rallied up to a lower high at 4420.75 just after 12:00, made a few more ‘higher lows and lower highs,’ and dropped down to the 4393 area. The ES rallied back up to the 4405 level at 3:21 as the MIM showed $173 million to buy, flipped to $233 million to sell, and the futures sold off down to 4386.50 on the 4:00 cash close.
In the end, it may have taken longer than what people were hoping for, but the two-day rally is a great example of one of our primary trading rules: It takes days and weeks to knock the S&P down and only one session to bring it back.
After a terrible start to the week, all three major indices are up for the week. Is the selloff over? It could be, but there are 16 trading sessions left in October. In terms of the ES’s overall tone, it was very bullish. When you get a move up like the last two days, it starts out as a short-covering rally. The ES sells off and more buy stops start to build up, as the cash stock buyers enter, the S&P cash firms up and the buy stops facilitate the offers in the ES that make up S&P buy program trading. All three major benchmarks are up at least 0.6% over the past four trading days. In terms of the day’s overall trade, volume was high for an up day with 1.96 million contracts traded.
Our View
They say the extension of the US debt limit helped push the S&P up. It may have added to it, but the ES and NQ were already in motion. Today is ‘Fryday’ and my lean is for higher prices. However, if the ES gaps up on the open, I may sell into the first rally. I know it’s counter trending, but if this trade works it could be an easy 10 or 15 points if not more. Then I would look to exit and find a spot to get long. I think higher, but I’m just not sure the October shenanigans are over.
Also, watch the labor report. That will have an impact on the open and will play a role in how we trade today.
As we all know, there’s no crystal ball when it comes to trading stocks, options, or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk-free for 30 days.
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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