***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 2 (CD2): Price action unfolded normally for CD2, with consolidation and balancing within prior value. Specifically above POC (3385) and below VAH (3405), this acted as support/resistance throughout the session. That was until MOC Sell $1.215B forced price lower, closing on low of day (3368.50). Range was 40.50 handles on 1.535M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price will need to hold above the CD1 Low (3356) during the RTH Session to secure a Positive 3-Day Cycle Statistic. As such, there are two scenarios to consider for today’s trading:
A decent sell building into the close with a 15:40 push higher was a perfect short setup into the reveal. A tick divergence signalled an exhaustion point. The 15:50 reveal was 1.2B to sell and we sold down into the close.
Yesterday we looked at the USA, today we will look at the world which unlike the USA has not had waves but plateaus and we are sprinting off the 2nd plateau and heading to 500K new cases a day. Daily deaths, like the 2nd USA wave, are showing a drop in mortality rate as therapeutics/age group, as well as testing rate, improve.
Europe has passed the USA in daily cases.
To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.
Wear your masks! Stay home! Take your Vitamin D!
Chart of the Day
S&P 500 Index (DEC)
Since the beginning of last week, we have been looking for a move towards 3385.
This target has been reached and we can now see a bounce.
Suggesting to keep a tight buy stop at around 3381.
First upside target 3407 then followed by 3426.
(ESH20:CME) GLOBEX Session
(ESH20:CME) Day Session
Opening Print: 3397.25
Total Volume 1.6M
S&P 500 RECAP – Trade Date 10/27/ 2020
#ES Money Maker Chart
S&P 500 Futures: Presidential CHOP
After trading in an 18.50-handle overnight range the S&P 500 futures opened Tuesday’s regular session at 3397.25, up 1.75 handles and then promptly traded to a morning low of 3381.25 before bouncing to a late morning high of 3400.75. Following a high low, the S&Ps made a high of day in the noon hour, printing 3401.50, before then making a series of lower high and lower lows throughout the afternoon, drifting on down to the low of day of 3376.25 before settling the day at 3380.25, down 15.25 handles or -0.42% on volume of 1.6 million contracts.
In terms of the overall price action, for most of the day it was about playing both sides of the market, with a lean toward selling the rallies.
Holiday Shopping Season Begins Early
It was a strange day for the S&P. After a long day of chop the ES rallied with the NQ going into the close but sold off after MSFT posted better than expected earnings as Brexit talks reached a critical point, France announced a 25 day lock down, and Chicago shut down indoor dining as COVID19 cases surge. The NQ led the way while the small-caps lagged while the Russell 2000 closed at its lowest price since October 6th. I am not going to be doing a big ‘view’ today. We all know what we are looking at in the next few weeks and it’s not good. The ES can rally but it can’t hold. It feels like something bad is coming and with only 6 days to the election and knowing all the votes will not be counted for at least a week to ten days after the election things are going to become unglued. Cities across the US are boarding up businesses again in preparation for ‘protest and looting’ and I don’t think it matters who wins, the protesters are coming back. Just think, November 3rd is the election, my guess is the Christmas shopping season for the protesters starts this week. Above is a picture of a Family Dollar store in West Philadelphia where looters could be seen going in and out of the ransacked store.
In Italy, protesters are setting fires and looting luxury stores as the government imposed new lockdown due to the increase of COVID19 cases.
Our view, I know the stats say the markets should rally but based on the price action I can’t rule out some type of bounce. I just think you sell it when they do. This mess is about to get a lot messier.
Market Vitals Technical Analysis
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As always, please use protective buy and sell stops when trading futures and options.
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