Market Review
When the President is tried the Chief Justice shall Preside
If it don’t fit you must acquit!
It’s strange how art (Seinfeld) and reality (Political Theater) blend together in this made for TV movie reality we’ve been in / viewing this week. A fire chief is not the same as the President of the United States of America. As George Canasta would say; “If you believe it…it’s true!” Aerostealian Logic seems to be the rule and not the exception in 2021…It’s the tool the savvy salesman uses against the weak minded, dimwitted individuals.
The market is not buying into it. On a day that should have been for the bulls, it was the bears’ ball. Cash opened in the middle third of the previous day and the bulls were hit hard with selling power. I was hearing 100 lots on my tape reader program at the top and on the way down.
The picture above of the Emini says it all. Support came in at the 10:00 marker but the selling pressure was constant. As price respected the supply line, the lunch high did not take out the AM HIGH. Selling pressure overcame the bid and penetrated the oversold line downward to the climax of the move where you see st.
Wyckoff Principles are clearly indicated. Where you see the SOS (Sign of Strength), then the LPS (Last Point of Support), the mid-pm low seals and a bid is found on the 5/8th (0.62) retracement. As the 2:00 / 2:30 comes into view, lifting power overcomes the selling power and the last hour ends strong, recovering the 10:00 low where a bid first entered.
Looking Forward Friday, February 12, 2021
After settle, the market went to find the 3914 high and started to drift down to test the 3900 marker. As I write, it is currently holding. However, that could change once the boys get off their helipads around 7:30, 8:00, and 8:30 this morning.
UPDATE: As I write, Fair Value is pegging -25 and climbing negative as price drops to find the 3890 marker and possibly lower. Today is not big on news. The question is, will buying pressure emerge and take the market home over the weekend?
If selling power is the path of least resistance, then 3884 and then 3878 might be tested today or over the weekend. The 3868 handle may be in the bears’ sights. That is if we lose the 12:00 marker where buying pressure held the lows. I’m leaning more to the bear side with selling power pushing Fair Value.
I give you the best of the old school market technicians, JP Morgan, Herriman, Kearn, and Livermore. The traders of the
1930s. How they may have seen the market. I use the lens of Richard D. Wyckoff Principles and Procedures and through the eyes of WB’s hidden internal clock. The clock that controls all turns intraday every day.
We had a good week this week. Our subscribers have been very lucky with the levels given: 5 Monday, 2 points, Tuesday, 40 points Wednesday, and 13 points Thursday. Total for the week 60 points, which would be $3,000 on 1 lot and $9,000 on 3 lots. That’s due to the volatility that crept back into the market. I’ll be the first to say, it does NOT happen every week. When it does it’s a beautiful thing!
I would love for you to join us. If you have not taken the time, now would be a great time for you to subscribe. After you subscribe drop me an email at trader@wyckoffamtrader.com we’ll set up a time to talk and help you discover how using WB’s clock can give you the gift of timing that you need in your trading life.
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MiM
Light MIM again. Fridays are usually busier, if we turn up light again today, something’s up.
Questions? Please email me: Marlin@mrtopstep.com
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Covid Corner:
Some new names in the Vaccine rage. UAE has taken first place in the percentage of daily vaccines doing 1.6% of their population. The US has been stuck at just under .5% for a while now and Chile has an aggressive program now doing about 0.75% of their population daily.
In volume, the US is still a world leader, although China is now claiming top spot. At 1.56M does a day, President Biden should be able to hit his 100M vaccines in 100 days.
Israel still has the distinction of having the largest percentage of their population fully vaccinated. UAE does not report data for fully vaccinated.
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
Under Armour Inc.’s two share classes in the S&P 500 Index are parting company on price. A gap between the athletic-wear maker’s voting Class A stock and non-voting Class C swelled Wednesday to 19.7% after fourth-quarter results came out, according to data compiled by Bloomberg. The spread was the widest since December 2016 and surpassed those for the S&P 500’s other four dual-class companies. Discovery Inc. came the closest, at a 17.3% spread between voting and non-voting shares. Gaps at Alphabet Inc., Google’s owner, and News Corp. were less than 0.5%. Fox Inc.’s voting shares were 4% cheaper.
GLOBEX
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3921.50 | Opening Print: 3916.00 |
| Low: 3895.00 | High 3920.50 |
| Volume: 14700 | Low: 3884.50 |
| ES Settlement 3909.00 | |
| Total Volume 1.26M |
S&P 500 Futures Recap – Trade Date February 11, 2021
S&P 500 Futures: 4 Days In a Row Closing Between 3905-3910
After trading in a 26.00-handle overnight range, the S&P 500 futures opened Thursday’s cash session at 3916, and traded the 3920.50 daily high on the open, and then decayed over the next couple of hours until sell programs fired in just after noon eastern time striking a low at 3884.50. From there the futures would get a lift for the rest of the afternoon, rebounding back up to 3907 before putting in a bullish close and settling at 3909 even. There was decent volume of 1.27M shares traded.
Our View
Chop, Drop & Rally
It’s hard to describe the S&P 500 futures (ESH21:CME) right now. It acts like it wants to go up but as soon as it does the sellers show up. I was speaking to the PitBull about this and he said ‘That’s right, it’s profit-taking.’ Based on all the rotations I was afraid to ask where the selling was coming from but my guess is it was in the smaller cap stock and the Dow. As for the S&P and Nasdaq, both traded within Wednesday’s trading range. Social media stocks were firm, energy was down over 1.5% and tech traded to a new all-time high. While I think the ES and NQ are going to continue up, I also have a funny feeling about the overall price action. During yesterday’s early rally attempts, the ES and NQ would uptick, go big, and the seller would set in and sell double the size. While the markets held initially, the YMH and RTH both started going down, then the ES and NQ finally broke. This early pattern of gap up or sell the early rallies has worked all week as has the buy the dip, it but feels like the ES is ‘running in place’. According to the Stock Trader’s Almanac, the day before Presidents’ Day weekend (today) has been up 11 of the last 17 and the week after has the Nasdaq down 16 of the last 26 and the Dow down 9 of the last 16. And next Friday, February options expiration has been down 14 of the last 21. Will all this work according to the stats? I doubt it, but it’s worth the read.
Our view, there has been a very distinctive pattern that has been staring us in the face, buy the ES and NQ on Globex and hold into the US open. I can’t tell you how many times that’s worked over the last few months but it’s a very high % trade. That said, its FRYDAY and not my favorite trading day of the week. I think many people will take today off and make it a 4-dayer but for those hearty futures traders that will be at their desks, I think the same pattern that has worked all week will work again today; you can sell the gap up / early rallies and buy the mid-morning pullback or you can just be patient and buy the pullback. I know the later Friday RIP has been hard to come by but I think the odds favor one today.
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.
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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