I do not know why this is happening but the Globex trade has really died; maybe the markets have an early case of the summertime blues. 

After Friday’s weak close, the ES made a Globex low at 5992.25, rallied up to 6019.75, and opened Monday’s regular session at 6012.75. After the open, the ES traded up to 6019.50, sold off down to 6000.00 and then aimlessly traded in a 6- to 8-point trading range until 12:50 when the ES traded up to a new high of 6026.75

The ES and NQ did it again. I get it, it’s a Monday at 12:35, and there is still a 19.50 point trading range. I think what’s happening is the markets are going up, but because of the small ranges and low volume, the ES has to sell off a few times, knock out the weak longs, and get people short into the decline. When that happens, the short covering causes small buy programs that push the futures back up, and that’s what’s going on right now. There is a total lack of participation at the current highs. Does that mean they are going down? No, it doesn’t; what it means is that the low volumes only add to the business. 

Late in the day, I tried selling it a few times, and after scratching a few times, I sold 2 ES, and just before that, MEJT (Jeffery Tenant) in the chat put this out.

IMPRO: mejt:(3:28:51 PM) >Dboy, a direct hit on a MEJT target has the potential to have a big move in the opposite direction so…
IMPRO:mejt:(3:30:17PM): I still have a 6001 target from the morning. I cannot take a position this near the close because I won’t be around all day tomorrow, but caution flags are out

We met Jeffery Tennant several years ago after William Blount passed away. William had a formula for Elliott Wave that worked really well when things lined up, and he had written some colorful names for his trade setups. They say old traders never die, they just float away, but the day William passed, all his knowledge did too. I have tried to get Jeffery to do a webinar, but like William, he is very protective of his work. I understand protecting a life’s work, but what I don’t understand is not having a plan in place so the knowledge lives on. 

still have a 6001.75 target from the morning. I cannot take a position this near the close because I won’t be around all day tomorrow, but caution flags are out

Our Lean

We have a very sparse economic calendar all week. Today’s lone economic release is the NFIB optimism index at 6:00 AM, Wednesday is the CPI number at 8:30 AM and the Monthly US federal budget at 2:00 PM. Thursday has the initial jobless claims number and PPI at 8:30 AM, and Consumer sentiment comes out at 10:00 AM on Friday.

It seems like the US and China are making progress. China’s Commerce Ministry said over the weekend it has approved some export licenses for rare-earth-related products in a goodwill gesture, and in return, Washington will ease China’s access to semiconductors. Like I said, I think China wants to get a deal done as Chinese exports to the US have fallen 35%. The news pushed NVDA and ADM higher as yields traded lower and the dollar weakened. 

Our lean: I think there is going to be some positive headlines out of the US/China tariff negotiations. One of our number one rules is that the ES tends to rally on Globex after a weak close. The ES just traded 6036.00, up 24 points at 9:30 PM. Ideally, I would like to buy a down open, and I can’t rule out selling a big gap up, but the money trade is buying the sell-offs/pull-backs. As I said yesterday, and I know it sounds basic, but I’m using ES 6000.00 as a swing number.

How to read MTS Levels

ES

The bull/bear line for the ES is at 6011.25. This is the key pivot level for the session. Maintaining price action above this level is constructive for buyers.

Currently, the ES is trading around 6014.25, just above the bull/bear line. If the market continues to hold above 6011.25, the first area of resistance is the prior session high at 6027.75. A successful move through that level would bring the upper range target of 6052.50 into focus. The next resistance level above that is 6091.50.

If sellers push the price back below 6011.25, it would indicate weakness. The first support would be the prior low at 5992.25. A break of this level would likely lead to a test of the lower range target at 5969.75. Further support can be found at 5931.00.

In summary, the sentiment is cautiously bullish as long as the price remains above the 6011.25 line. A failure to hold this level would shift the intraday trend to bearish and favor downside exploration.

NQ – Week to Week

The bull/bear line for the NQ is at 21,814.75. This level is the key pivot for determining the intraday trend.

Currently, NQ is trading around 21,837.50, holding just above the bull/bear line. If the price remains above 21,814.75, the immediate resistance is at 21,878.50. A move above this area would bring the upper range target of 22,013.80 into play. Further strength could see a test of the 22,201.00 resistance level.

If the market fails to hold above 21,814.80, it would be a sign of weakness. The first level of support to watch is 21,716.00. A break below this support would likely lead to a test of the lower range target at 21,615.80. The next support below that is at 21,428.30.

Overall, the sentiment is bullish as long as the price stays above the 21,814.80 line. A sustained break below this level would shift the intraday bias to bearish.