Despite a nearly 300-point fall in September off its all-time high, the ESZ20 remains firmly in a long-term uptrend post the February & March coronavirus induced crash. On Wednesday, the ESZ20 took a hard bounce off its 50-day moving average, and then again on Friday. The ESZ20 spent the last week working the 3300 to 3400 range and could move in either direction from here. There is a good likelihood the bulls will try to take prices higher this week if the 3400 area can be cleared. On the downside, if the bears can clear 3285, then we could be in for a tumble back through the 3200s where there is plenty of support from July and August.
Volatility spiked up after the Labor Day holiday to levels not seen since late March with the ESZ20 5-day average range exceeding 128 points late last week. It will be interesting to see if over the next week the technology stock driven market will recover. I suspect the ESZ20 will resume a slow climb to retest its 3576.50 all-time high. There’s a nearly 200-point low volume area above 3400 so it’s possible the ESZ20 might spend a few weeks working that area.
Below is a snap of the ESU20 daily chart with the above support and resistance numbers marked for reference. Thanks again for reading. For more information on how DTG can help your trading, visit us at DiscoveryTradingGroup.com
In the Tradechat Room
Run up into the reveal with a downside surprise of 513M to sell, no breadth but a nice 8-point slide on the 15:50 candle
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Our COVID discussion today is an observation of how the daily cases/daily death curves have swapped. We are now adding twice as many new cases on a daily basis compared to the peak in April but adding only 1/2 the daily death count. I am sure it is a combination of more testing, better control on access to long-term-care facilities and the vulnerable as well as better treatment. We are slowly but surely learning to live with COVID.
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!
Chart of the Day
|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3374.50||Opening Print: 3363.50|
|Low: 3336.25||High 3392.50|
|Volume: 420,000||Low: 3258.25|
|ES Settlement 3372.00|
|Total Volume 2.19 M|
S&P 500 RECAP – Trade Date 09/14/ 2020
#ES Money Maker Chart
S&P 500 Futures: Return of Mutual Fund Monday
After rallying during the Globex session, the S&P 500 futures opened yesterday’s cash hours at 3363.50, up 38.75 handles, printed a 3358.25 low of day in the opening minutes, and then rallied strong in the first hour, printing a 3392.50 high of day just before 9:30, up 67.75 handles. From there the rest of the morning would chop sideways making a 3381.00 low. The noon hour saw some selling as the index futures dipped down to 3369.75 and then after a bounce to 3383.00 at 1:15, the selling continued as the ES would go on to print 3364.50 early in the final hour before rallying back up to 3387.00 late in the day.
The ES settled at 3372.00 up 47.75 handles or +1.45%. In terms of volume, it was a strong day with nearly 2.2 million contracts traded. As far as price action, most of the buying was in pre-market or in the first hour. From there the ES sold off 20 handles, rallied and down ticked going into the close.
Sell Rosh Hashanah, Buy Yom Kippur
Well, Monday didn’t disappoint and neither will the rest of the week. That said, the mid-month rebalance worked well (always falls on the 14th) and today is day one of the Fed’s two-day meeting. The September Quad Witching is on Friday and we can’t forget the Jewish Holiday Rosh Hashanah and the old trading adage that says ‘sell Rosh Hashanah / buy Yom Kippur’.
First let’s talk stats; according to the Stock Trader’s Almanac the week of the September Quad Witching saw the Dow fall 1,370 points or down 14.3% in 2001, the 4th worst weekly point loss ever and the 5th worst week overall. Expiration Friday has been up 11 of the last 15 but when it comes to Rosh Hashanah the data is not all that convincing. Additionally, when you look at the data back to 1971 the Dow Jones Industrial Average falls an average of 0.6% between Rosh Hashanah, the Jewish New Year, and Yom Kippur, the Jewish Day of Atonement. This year, Rosh Hashanah begins the evening of Friday, Sept. 18 and ends the evening of Sept. 19. The exact dates of Rosh Hashanah change every year, but it overwhelmingly falls in September (the rest of the time, it falls in early October), a month that is historically the weakest of the year, with an average loss of 1.05% since 1896. Across the other 11 months, there is an average gain of 0.75%. Historically speaking, the odds of the trade working are slightly better than 50-50, but only barely. Over the past 46 years, the Dow has fallen 26 and closed high on 20 occasions. What’s it all mean? Based on the current price action my guess is it just adds to an uptick in volatility.
Our view, it seems like 75 and 100-handle moves in the S&P have become commonplace. Or lean is to sell the early rallies and buy the pullbacks. If the ES gaps 10 to 15 lower I would look to buy the open but with tight stops.
Market Vitals Technical Analysis
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