Last week I wrote “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.” After a bounce off the 3285 area on Friday, the ESZ20 took the tumble into the low 3200s (3217.25 to be exact) on Monday before an afternoon bullish bounce. Last week, it appeared the bulls would keep control after a third bounce off the ESZ20 50-day moving average on Thursday, but Friday’s move through set the stage for Monday’s tumble. The ESZ20 is now back in the comfort zone of late July and early August which makes it difficult to predict what will happen from here.
Both the bulls and the bears have plenty of room to work and it is unclear if Monday’s selloff and bounce is a short-term bottom. The 50-day MA may now become resistance and hinder any bullish attempt to move above the 3320s. If the bulls can clear, then 3440 becomes the next significant area of technical resistance. To the downside, the 3200 high-volume area remains key and if the bears can clear, then the low 3100s is in the cards. Just below 3100 is the ESZ20 200-day moving average, a significant marker for long-term players.
After settling down last week, volatility is on the rise again. We are in the volatile months of September and October so heightened volatility can be expected.
Below is a snap of the ESZ20 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
A rally into the close paused for the MOC and a lot of traders were quite happy with a -864M sell imbalance. We are done with OPEX and are looking forward to a cleaner week.
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It’s Tuesday, so election day reporting. Above are the daily case curves for the hottest contested tests. Most are doing well with the exception of Wisconsin which is in runaway mode. The Wisconsin rise is blamed on students returning to socially unsafe practices.
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 3326.25||Opening Print: 3258.00|
|Low: 3247.25||High 3276.50|
|Volume: 450,000||Low: 3217.25|
|ES Settlement 3274.75|
|Total Volume 2.44 M|
S&P 500 RECAP – Trade Date 09/21/ 2020
S&P 500 Futures: Down 9 Of The Last 12 Sessions
After another overnight selloff, the S&P 500 futures opened Monday’s cash session at 3258.00, down 59.25 handles and in the opening minutes traded up to a morning high of 2366.25. From there, at 8:45 CT, the S&Ps continued the selling, pushing lower throughout the early morning down to 3217.25 for the low of day around 9:45, down 100 handles on the session.
Midmorning did see the sell pressure relax as the ES would go on to trade up to 3248.75 for the midday high, a 31.50 handle bounce before sellers tried one more time for new lows early in the afternoon but couldn’t manage to push below 3221.75. Then late in the session a rush of buying came in that propelled the index futures into the close as the ESZ made a high of day of 3276.50 in the closing minutes, a 59.25 handle rally from the morning low.
The ESZ20 settled the day at 3274.75, down 41.50 handles or -1.25%. Total volume was a hefty 2.44 million contracts. The day was all about selling the opening rally and covering midmorning, then buying the midafternoon low and holding into the close.
A Confusing ‘State Of Affairs’
In the investing world, only a small portion of stock market investors like to sell the markets. Long-term holds of mutual funds are mainly buy only. But outside that are futures and options traders that ‘love’ selling. They like to take advantage of overbought conditions and bad news which there has been no shortage of. I have to be 100% honest, I don’t know and nor do I think anyone else really knows what is going to unfold in the next 42 days leading up to the election. What I do know is both the republicans and the democrats will contest the vote should either side win. When that happens all the uncertainty will definitely play out. I am going to keep this short and sweet. I laid out this week’s fed speak and economic report yesterday and rest assured, the markets are going to get very volatile both this week and in the weeks ahead.
Our lean, I am sorry I could not be more specific in yesterday’s view. I posted the stats that showed how weak the markets get the day after the September Quad Witch and sure enough, it was spot on. I did do one thing correctly, I sold the ES several times yesterday and made some very profitable trades and I called for the late day RIP that was spot on and made 30 handles on the late long but today is a new day. Its 7:48 PM CT and the ES has traded up to 3289.50, 72.25 handles off yesterday’s 3217.25 low. Our lean is to sell a gap higher or the early rally and then buy the pullback. I think there is a good chance we see an early low and I am looking for a push back up to the 3340 area. If the ES gaps down I would look to buy the open but it has to be down 15 to 20 handles to get me excited.
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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