Topic: Taylor 3 Day Cycle Author: David D Dube (a.k.a. PTGDavid)
Tuesday’s Session was Cycle Day 2 (CD2): Because of the holiday shortened session, the normally expected decline for Cycle Day 1 was delayed into Cycle Day 2 Morning Session. The Afternoon Session reflected a normal Cycle Day 2 consolidation type trade. Market on Close Buy Imbalance was $1.1Billion.Range was 40.50 handles on 1.287M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price is currently (as of the close) below Cycle Day 1 Low (3947). We would be expecting some magnitude rally for this CD3 to recover the CD1 Low. As such, there are two estimated scenarios to consider for today’s trading.
Fridays are usually busier, if we turn up light again today, something’s up.
1.1B to buy on the 15:50 MOC. The early MiM showed no real bias and although we had a decent top side number over a billion there was sill no real lean with 60% of the symbols showing a buy.
What does the 15:50 MOC look like on the tapes? We are building out our SpyGate product, an AI bot that will help us read the tape in real-time watching every trade in streaming format on every symbol in the SP500. Yesterday we had over 4M trades right on that 15:50 MOC release. To give you an idea, there are hardly ever over 1M trades at once. So if you wonder why that 15:50 time is so volatile, there it is.
The chart above represents just on minute of trades of S&P 500 Symbols. At the 15:50 release, the initial orders came in as a buy and drove up the market and then the programs hit hard and starting selling. We will now be able to see that instantly and see how the market is reacting to the MOC which is more important than what the MOC is.
SpyGate should be available to all our MiM members starting in March. I hope to have an alpha version out next week! This is the last chance to join at 2020 prices so click below.
LAST CHANCE TO JOIN THE MIM AT 2020 PRICES. We need to raise our subscriptions prices for 2021 to cover the increased data fees. Why do internet and computers get cheaper and cheaper but data more expensive? To be grandfathered in for 2021 you need to purchase now.
The US in general is doing better across the board. We see some red states in the chart above, but those are still very small and off a large drop. That does need to be monitored for another wave beginning with fear that the more virulent versions will start to spread.
Wear your masks! Stay at least 10 feet behind someone wearing a mask! (Particularly in a checkout line) Stay home! Take your Vitamin D!
Chart of the Day
(ESH20:CME) GLOBEX Session
(ESH20:CME) Day Session
Opening Print: 3943.00
Total Volume 1.4M
S&P 500 Recap – Trade Date February 16, 2021
S&P 500 Futures: Globex Bulls Give Way To RTH Bears
After trading in a 24.50-handle overnight range, the S&P 500 futures opened Tuesday’s cash session at 3943.00, traded the 3945.00 daily high on the open, and then sold to the 3918.75 low of day just before 11:30. The early afternoon would rally up to 3937.75 before showing late-day weakness settling at 3925.50, down 1.75 handles on modest volume of 1.4 million contracts. In terms of price action, it was all about selling the open and reselling the afternoon high.
Bond Yields, Bitcoin 50k and Record Cold Weather
The ES backed off a new high high as bond yields rose yesterday reflecting investor concern about the day’s surge and Bitcoin traded up to the 52,000 area after breaking through 50,000 yesterday. Over 150 million people are under winter advisories as the ‘unprecedented’ storm stretches across 25 states and 4.3M are without power in Texas. Natural gas prices hit a historic $999/MMBtu high as record demand strains fuel supplies and slows the deliveries of the Covid-19 vaccine distribution. These are just a few of the things the markets are facing right now and there is another snow storm coming!
Our view, the S&P has posted 76 new 52-week highs and no new lows. The Nasdaq is now 7.1% above its 50-day moving average, still somewhat extended but down from Friday’s 7.7% and Feb. 8’s 8.1% and it continues to shrug off the above concerns with only short-lived pullbacks. How long will the rally continue? As long as the government continues its push for the new $1.9 trillion stimulus package, after it is passed, and beyond. Let’s face it, the markets are artificially being pushed higher but that’s not slowing investors’ appetite for stocks. February has been the best month for stocks since November. While yesterday’s overall price action was weak it was really centered on the Nasdaq. The last 50-handle sell-off in the ES was followed up by new highs and from yesterday’s 3959.25 high to last night’s 3913 low the ES has pulled back 46 handles. Our lean is to look for an early pullback to buy. That doesn’t mean you can’t sell the rallies, we just think a bounce may be in the cards.
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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