Market Review
Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 3 (CD3): In the previous week’s DTS Briefing Report 9.2.20 we were talking about “Buy the Dip” being the trade strategy. One week later, it’s a much different market…”Tech Wreck” and “Sell the Bounces” are the new buzz phrases. Price failed to clear 3440 handle, a bearish shifted 3 Day Central Pivot Zone, which is PTG’s proxy for trend direction. Value has also shifted to bearish configuration (i.e. Lower VAH and Lower VAL) Previous session range was 119.50 handles, twice the 10-day average of 54, with 2.370M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Price is below the prior low (3328) and well past the Average Decline for CD1. As such, there are two scenarios to consider for today’s trading:
1.) Price sustains a bid above 3328, initially targeting 3355 – 3365 zone.
2.) Price sustains an offer below 3328, initially targeting 3295 – 3282 zone.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet >> Cycle Day 1 (CD1)
Thanks for reading,
PTGDavid
Polaris Trading Group
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Selling into the close but the MIM was showing a buy imbalance, and a pretty good one, too. Around 15:30 we were advertising a decent 1.1B buy. We had breadth alignment with about 80% of the imbalance dollars in the buys and 71% of the symbols showing a buy imbalance. What we cannot see early before the 15:50 reveal are the last minute orders that come in just before the auction start and what is building on the Nasdaq books since we are NYSE only for early data.
The third chart today is our advance/decline chart showing how the markets traded into the close. It was a decent sell day with the N100 having a 20:1 down day, that is 20 stocks down for every one stock up. Pretty onesided for the bears. Not so bad on the broader markets with the Nasdaq Comp down just 2:1. It is not broad-based selling we are seeing. It is index selling and tech selling. Those came in only at 15:50 and swamped out our early data and shaved off about ten points on the 15:50 candle. It is rare to see the MOCS reverse a strong selling day in price action and when you don’t have data on the strongest movers into the close (NQ) you need to approach the data carefully.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Covid Corner:
There was a lot of talk last week about South Dakota and their scary upside heading into September. That spike has been blamed on a single event around the Sturgis bike rally that ran from August 7 thru the 16th. The good news is that the daily new cases are coming back down. It looks like the hospitalizations might be starting to follow. Interestingly, the new daily deaths seem unaffected.
Since the event was a migratory event and people came from thousands of miles around, COVID had a great opportunity to do some bike hopping around the country. A non-peer-reviewed study using cell phone data and CDC data estimated that the net effect of the rally was 267,00 new cases and at $12.2B healthcare bill. The study used a fixed cost of $46,000 per COVID cases.
A review of Florida and how they are doing shows that in new Daily Admissions they are back to their April/May numbers, down over 50% from 500 to around 200 now. That is good news.
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!
Chart of the Day
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3484.25 | Opening Print: 3460.25 |
| Low: 3426.50 | High 3477.25 |
| Volume: 350,000 | Low: 3344.75 |
| ES Settlement 3418.25 | |
| Total Volume 2.9 M |
S&P 500 RECAP – Trade Date 09/08/ 2020
S&P 500 Futures Lowest Close Since August 5th
The S&P 500 futures opened Tuesday’s cash session at 3365.75, down 52.50 handles, traded down to a morning low of 3337.25 in the first fifteen minutes before rallying 42.25 handles to 3379.50 in thirty minutes for what would amount to the high of the day. From there the ES would trade back down to 3342.25 making a higher mid-morning low and then rally to a noon lower high of 3376.50.
At 1:00 steady selling would enter the index futures as the S&Ps would make their way lower, printing a 3327.50 low of day as the markets went into the final hour. The late day rally to 3354.25 wouldn’t hold as the ESU settled the day at 3336.25, down 82.00 handles or -2.48%.
Total volume was a strong 2.66 million, meanwhile, the day’s price action was all about selling the rallies. As the PitBull has always said, the day usually closes as it opens, and when the ES opened significantly lower and failed to hold a rally, there was only one direction for the afternoon.
Our View
Nasdaq Down Over 10% in 3 Sessions
OUR VIEW:
The Nasdaq entered ‘correction territory’ yesterday just three sessions after making a record close last Wednesday, the fastest fall ever. The Nasdaq 100 gained 9.99% for August, its fifth positive month in a row. There is an old saying that the stock market goes down 10 times faster than it goes up and surely that’s been the case over the last few days. All the big tech leaders / FAANG have taken a beating. AAPL closed down $8.14 or -6.7% to $112.82, down 14% in the past three sessions and lost over $320 billion in market value. After the close, the ‘already weak’ ES and NQ dropped down to 3295.50 after a headline hit that COVID19 pharmaceutical company AstraZeneca was putting off its trial for ‘safety concerns.’ The ES that closed at 3227.50 dropped 32 handles in less than an hour and then traded up 42 handles to 3337.50 going into 8:00 CT.
Our view, yesterday’s ES volume including the post-trade was 2.9 million contracts traded. That is the largest since the beginning of the COVID crisis. One side of me says the markets are setting up for a bounce but the other says why couldn’t this decline go on for a few weeks? The NQ bottomed on March 23 at 6,600 and rallied all the way up to 12,468 last week. Our lean is for an upside ‘pop’ today. The big question; will it hold?
Market Vitals Technical Analysis
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As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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