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!
The country is coming undone at the seams. September / October may just be the catalyst for the truth to be revealed. Cyberwar perhaps kinetic looming? Yea, that kinda started over last weekend. I said that about a month or so ago. Our hearts and prayers go out to those who have lost blood and treasure.
To better understand yesterday’s trade, one merely looks at Monday’s trade. A 40-handle run to the upside (Friday was a 50-point trading range). Then Tuesday, 31, good progress. However, Wednesday and Thursday saw 11- and 17-handle trading ranges. This indicates buying support is unable to gain a following at these highs.
Now consider the volumes – 980, 765, 600, 630, and this confirms that notion. If you watched the last hour Wednesday you could see a potential upthrust after distribution with price closing at the highs on increased volume. Globex is unable to claim a new high, just defend the low of RTE CASH. This foreshadows a potential move to the downside.
As the hurt locker opened up Thursday morning I saw some size taking advantage of the late bulls at the 4492 handle. Price was never able to recover.
Weekly: Bulls lost some ground from the highs on increased volume.
Daily: Price gave way at the open and keeps on failing past the previous two days. It found support at the third day 1/3 top trading range.
Technical Position: Price opens and starts to drift down. By 10:30 am the bid drops and a low of day is found below the low of the past two trading days. Price is oversold and sold out. A rally up to 12:00 pm seals the Automatic Rally and a Secondary test at 3:10 pm. This indicates, for now, the down move is checked.
Looking Forward to Friday, August 27, 2021
GLOBEX: Around 20:00 price broke through the supply line with a 16-handle run. Currently, price has recovered half the loss from the 12:30 pm decline. Price has narrowed into a 5-point trading range from 4473 handle. By this time, price will either break free on the upside to challenge the 4485 and higher or break through to test the 4465 handle.
Trade Plan: The halfway retracement is 4422 handle. Providing buying support can defend that level, this would be the bull/bear line. Weekly pivot 4419 handle. You may see a few seismic bumps around 8:30 am but the needle may move off the page as Jerome Powell speaks from Jackson Hole around 10:00 am on his zoom call.
If buying support can take the 4492 you may see little resistance as price moves back to test the current all-time high. That is if the results from Jackson Hole are in agreement with the bulls.
If we lose the 4465 then you could see some buying support come in at 4455 or lower. That is if the results from Jackson Hole are in agreement with the bears.
The POTUS is losing support from the other NATO countries. That is the potential reason for the hesitancy to act. The question is; “Does he have the street’s support?”
Offing Events: The debt ceiling was kicked till September. Trillions in the Senate were 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. Cyberwar perhaps kinetic looming? Yea that kinda started over last weekend.
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.
Economic Calendar
Closing Prices
In the TradeChat Room
Market On Close: $660M to buy, too little too late.
The MOC was 660M to buy but the 15:55 dquotes sold into that even flipping the imbalance. A negative close.
Check out all the Market Closing action in our daily post
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
.
SpyGate: News had the bots selling into the AM low. No escaping at as we returned at the close.
Check out our Daily SpyGate Post
SpyGate is now available free to members of IMPRO and MIM trading room. Join the MiM.
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.
Baxter missed the high call which came at the front end at open as the tape became news-driven which is hard to forecast. We won’t hold yesterday’s outcome against him.
For today, Baxter is over 60% convinced that the low will come in the AM with the 09:30 slot and 10:00 to 12:00 slot having 30%. He is least convinced that the low will be at the end of the day giving only a 12% chance there.
He is showing 30% for the first time slot, 29% for the 2nd. That has him 59% convinced it will be an AM low. The two afternoon slots are 23% and 16%, respectively. That may not be too much help. He is 78% convinced that the high will come in the last 30 minutes. For the high of the day, his time slot pick is between 12:00 and 15:30, not the final 30 minutes.
Chart of the Day
Nordstrom markdown, Macy’s markup open unusual price gap
Second-quarter earnings reports by some of the largest U.S. department-store chains triggered a feast-or-famine reaction among stock investors. Nordstrom Inc. tumbled 17.6% Wednesday after quarterly results proved disappointing. The decline contrasted with gains of 7.3% for Kohl’s Corp. and 19.6% for Macy’s Inc. after they put out figures last week. Nordstrom trailed Macy’s by 37 percentage points, the biggest post-earnings performance gap among the retailers in more than a decade, according to data compiled by Bloomberg. The previous high was 30 points, recorded seven quarters earlier.
Our View
S&P 500 Drops As Fed ‘Taper’ Headlines Hit
The S&P futures (ESU21:CME) started selling off when three of the most hawkish Fed governors said they were in favor of accelerating the timetable for slowing asset purchases. The ES was acting weak before the headlines, but sold off fast early in the day and showed weakness again later in the session.
However, that early selloff gave us plenty of great trading opportunities in the Mr. Top Step Chat Room. Plenty of traders did quite well on the day, trading both the ES and the NQ.
The ES opened Thursday’s regular trading session at 4489.25, ticked up to 4492, dipped below the opening price to 4486.50, and then rallied up to a lower high at 4491.25. The ES sold back down to 4484.75, made another lower high at 4489.50, dropped down to 4469.25, and then quickly rallied up to the 4482.50 level just after 10:30.
Then things got a bit wild.
The next move was back down to new lows at 4465.25 and then another push back up to the 4482.50 level. After some sideway price action, the ES pulled back down to the 4478.50 level, rallied back up to the 4482.50 level, and then dumped down to 4475 at 1:30.
Late in the day, the ES made a new low at 4465, a quarter-point below the morning low, and tried to rally. It did, but not by much.
It traded 4470 as the 3:50 cash imbalance showed $655 million to buy and traded 4468.25 on the 4:00 cash close. The ES settled at 4470, down 23.50 points or 0.52% on the day.
In the end, it was a choppy mess. In terms of the ES’s overall tone, the futures were weak but they were also dominated by the two blasts that ripped through crowds at the Kabul airport that killed 13 US service members, injured 15 Marines, and killed at least 90 Afghans. In terms of the day’s overall trade, 172,000 ES contracts traded on Globex and 1.11 million futures traded in the day session for a not-so-grand total of 1.29 million futures traded. Still, that is notably more than what we saw on Tuesday and Wednesday.
Our View: Event-driven selloffs are never easy to trade. Yesterday’s first event was the Fed’s Jackson Hole Symposium and the other event was the bombing at the Kabul airport. Neither was good for the markets. Some think the markets will bounce today, but I say the odds of another drop are high.
The ES only sold off 27 points from its high, so I would not consider the drop much of a selloff. That said, as the news sinks in about the fatalities and injuries in Afghanistan and the possibility of more attacks, the level of uncertainty will increase. That is never a good thing for the S&P.
Our Lean: I did well in the first part of the day and started doing stupid things late. This morning, Federal Reserve Chairman Powell speaks at 10:00 AM. A lot of folks think he will shy away from the ‘taper’ talk but I am not one of them.Like I said above, the ES only fell 27 points from its high — not something to get overly bearish about. We all know the Fed is going to start tapering soon, but that’s not going to offset all the money the government is still spending. My guess is we see higher prices today, but I want to get a look at the Powell headlines. Sell the early rallies and buy the pullbacks. 4520 is still on TAP!
Don’t get our premium Opening Print each morning? Start your day with MrTopStep’s Premium Opening Print in your Inbox: Special $9.95/month
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
No responses yet