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!
Perhaps it was the smoke of last week’s Fed meeting? The fear of the next virus sweeping the nation and then the world? The big boys getting back in town? Changing to the D’s or just traders selling to take profits but September has set the mark for a rough ride for the bulls. Due to the events of the previous weeks, America is not that great of a place, for your money that is…
Weekly: The opening set the bar, perhaps it was too high and the bulls could not reach it. Price has moved South and is looking for a bid.
Daily: Globex took it to lows. Price rallied for 240 minutes set the AM HIGH and then all but gave it away. Volume increased on the down move.
Market Timing: Yes, it looks like it would be flipped to an S2H day. The AM HIGH came in center time. And the lunch low just kept going lower bleeding into the Mid pm high window.
Technical Position: Bigger picture it was a fall through Ice and a rally back to the 4530 handle which was Wednesday’s open. I saw big size coming in on Morgan Stanley and price could never recover after 10:18 am. Bonds drove the inverse relationship to the CASH and trapped longs could not recover so they gave it up as price cut through bids like butter.
Looking Forward to Friday, September 10, 2021
GLOBEX: Held the low of 4487 and found a bid. Price dips at 4489 finds a higher high and it’s off to the races. The big even 4505 has offered some resistance.
Trade Plan: By my eye, I still see a bid being held. Volume yesterday was higher than most and the lows were held. The last 10 minutes had some selling. However, Globex has been able to overcome that. If price can overcome 4530 there should be no hesitation to take it higher. However, that may not happen today…
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 the last two weekends.
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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 called for a high during the last 30 minutes of the day and was pretty sure. He was wrong, the high came in during the 10:00 to 12:00 sector.
Bax was also 180 on the low, calling for a low in the first 30 minutes. The low came in mid-day around 14:00.
No bones for Baxter for yesterday’s calls.
We run our models overnight on our GPUs trying to add more data into them for digesting and improvements. We have added gap information and are encouraged that it will improve Bax’s predictions for a low time frame. Those runs have not been completed in time to try a prediction for today so Monday for the new models.
For the low Bax likes the first 30 minutes and for the high, he’s predicting the 10:00 to 12:00 slot. That would make for a boring afternoon. Looking forward to the weekend.
Chart of the Day
Amazon beats Germany’s DAX by market value
Amazon.com Inc. has become more valuable than all the companies in Germany’s stock benchmark combined. The comparison arises from a report Wednesday by Andrew Garthwaite, a global strategist at Credit Suisse Group AG. “It is concerning,” he wrote, that the online retailer has a greater market value than the DAX Index’s 30 components. Amazon first beat the German gauge’s value in March 2020, according to data compiled by Bloomberg. The company has sustained the lead most of the time since then, though it trailed for a seven-day stretch last month.
The S&P 500 futures are now down four days in a row with Thursday’s 0.45% dip. That was the largest decline amid the stretch, which is a bit laughable, but overall the ES is down just 1.25% from its all-time high.
Yes, we’ve had a pullback, but it’s hardly allowed the bears to eat, let alone feast.
The theme of overnight pullbacks continues. In Wednesday’s Globex session, the ES pulled back to 4485 and reversed higher. By the time the regular-hour session came around, the ES opened near 4510.
It quickly pushed higher, catching a number of traders offsides. After topping out near 4529.50 at 10:30, the market reversed lower and went negative on the day. The ES fell in six of the next seven 30-minute windows and ultimately bottomed near 4490 around 2:00.
The rally didn’t last long though, with the ES topping around 4505 and flushing lower into the close. The ES ended at 4493.25 and settled lower by about 20 points on the day.
In terms of the ES’s tone, we started off firm but then rolled over and couldn’t gain much upside momentum. In terms of the day’s overall trade, volume was solid at 1.67 million, its highest tally since August 19th.
Again, we continue to see the overnight pullbacks! When the futures opened on Thursday night, they gapped below all of this week’s lows. Luckily, the ES bottomed near 4479 but it has been rallying ever since, now back above 4500 as of 8:00 Friday morning.
It was a near-perfect test of the prior breakout high at 4476.50 and the 21-day moving average, an area we were closely watching yesterday.
All week we’ve seen them sell the ES down overnight, rally it back by the open and sell the up-move around 10:00 to 10:30. The one exception is Sept. 7, where the selling picked up right before the open and didn’t stop until almost noon. But the story has all been the same, as they are selling the open.
Our Lean: It’s hard to be a seller of the ES when we’ve seen four down days in a row — especially as we come in on a Friday. That said, we’re not down much from the highs and so far, the pattern of the overnight dips continues.
Since the ES has rallied so much overnight, I would love to see an early morning pullback, giving us a chance to buy and potentially ride into the close. Or at least the afternoon. Like I always say: The ES can pull back one or two days and sometimes three days or more but it only takes one day to bring it back.
If we get another early morning rip, we might get a chance to sell it — just like we have all week — if the breadth is only mild. However, let’s see if we get a nice dip to buy.
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.
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