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 2 (CD2): 3 Day Positive Cycle Statistics were fulfilled as price continued in rally-mode, notching new all-time highs. Price successfully tested prior VAH (3422) early, as initiative buyers took control for the entire session, closing near high of the day. Range was 27 handles, slightly under 10-day average of 31, with 1.1M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Bullish price momentum is firmly in-place with nothing but blue-sky above. Next key Cycle Zone measures 3470 – 3472. We then have two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3448, initially targeting 3458 – 3465 zone.
Link to access full Cycle Spreadsheet >> Cycle Day 3
2.) Price sustains an offer below 3448, initially targeting 3438 – 3430 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:
Thanks for reading,
In the Tradechat Room
A whole lot of nothing on the MOC as the 15:50 reveal showed just -3M. That is about as balanced as I have seen it. The market rallied strongly from 14:00, paused around the reveal, and then marched confidently higher into the close. Very bullish.
estions? Please email me: Marlin@mrtopstep.com
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We continue to track Covid-19 across all 50 states, DC, and Puerto Rico to gain a better understanding of what is happening. While detected cases continue to expand, we are not seeing the equivalent expansion in hospitalizations and deaths. Our table uses 7-day averages and takes a 5-day linear regression slope in order to detect changes as quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).
Florida continues its nice fall down over 66% from the high. Texas is nearing the 50% mark and California, if all holds, should hit that next week.
We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M) looking at daily deaths, but more importantly, changes in the count.
California is still playing catch up with the smaller Texas and Florida. Good progress on the latter two, we expect to see a move down in California the end of this week into next week.
Over / Under
These are the over/under numbers for today. In order to push the 7-day average lower, today’s reported numbers need to be lower than the target number. A new case or death number that is higher will increase the 7-day average.
Yesterday’s over/under numbers and actual are also in the table.
|Florida||3,838 /2,673||219 / 183||4,115||174|
|Texas||7,282 / 6,346||216 / 181||7,024||309|
|California||4,636 / 4,480||100 / 195||6,164||181|
|New York||655 / 629||8 / 2||631||6|
Use today’s numbers to watch the releases to determine the trend.
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 3448.75||Opening Print: 3434.75|
|Low: 3426.75||High 3443.50|
|Volume: 218,000||Low: 3421.75|
|ES Settlement 3442.75|
|Total Volume 1.2 Milliion|
S&P 500 RECAP – Trade Date 08/25/ 2020
#ES Money Maker Chart
#ES Bulls Crash Turnaround Tuesday
After rallying up to new highs at 3448.75, up 21.00 handles, the S&P 500 futures rolled over into the cash open, printing 3434.75 on the first print, traded a morning high of 3436.50 in the first half-hour, and then sold off down to 3421.75 just before 10:00 a.m. for the mid-morning low. After a 12.50 handle bounce for a late morning high of 3434.25, the S&Ps retested the bottom, made a higher low of 3422.50 and then began a midday rally in the noon hour.
The afternoon saw a quiet trade, but one that was consistently bid, as the ESU steadily rose each hour into the close, making a high of day of 3443.50 just before settling three ticks lower at 3342.75 in what amounted to a 22.75 handle rally off the low which failed to meet the Globex high. At settlement, the ES20 was up 15.00 handles or +0.46%.
In terms of price action, it was a two-sided day. Most of the morning belonged to the sellers, meanwhile, buyers had a nice, late morning retest of the lows that set up for a strong afternoon rally. Total volume was a light with 1.2 million contracts traded.
COVID19 Drop & 5 Month Pop
The COVID19 pandemic is now going into its 6th month and the 5-month rally in the ES and its new all-time highs show no sign of retreating. Everyone was worried about ‘sell in May and go away’ and then there was the last week of July to the third week of August warnings. Both warnings produced new highs. I am going to reference a story out of MarketWatch that says ‘the conditions are even stronger now for a correction. One big reason is that short-term market timers have become extremely bullish, which is not a good sign from a contrarian perspective’. I am not saying we won’t pull back from the highs but the statement about short term markers turning ‘extremely bullish’ is hog wash. Every well known market timer has been calling for a retest of the March lows for the last 3 to 4 months. The only thing the market timers are known for is an abundance of very bad calls. What I mentioned a few days ago was lining up a high in October around the same time as the 1987 crash. Even then I feel confident the selloff, no matter how severe, won’t last long. According to Stock Trader’s Almanac, ‘there are almost always market declines over the three months prior to presidential elections’. The way I see it is until the trend turns ‘unfriendly’ keep buying the pull backs.
Our view, at some point the ES is going to get too stretched out and will pull back. The big question is when? Is it today? Tomorrow? Later this week? Next week? I don’t know but I am not up for fading the overall price action that is selling the early gap up or early rally and buying the midmorning pullback/low. I also want to add, use tight sell stops. If we don’t pull back today it could be Thursday morning after Powell speaks. Bottom line, be careful.
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