Market Review
Last week our view was to look for 3290, this was achieved. Currently, we have targets to 3310 and fractal targets to 3375. The pattern we are seeing is ATH’s in the Globex session and better buy opportunities in the cash session. It has paid to hold these positions overnight thus far.
We have been bullish for this OPEX week since Monday’s Globex, we may see a short term high by the end of this week.
For us, it’s currently just a buy on dips rather than trying to trade both sides. This will change, but for now, we are using this strategy until we see our targets completed and new downside ones appear from the model we use.
For today the Initial levels for buys:
1) 3275.8 – stop 3370
2) 3255.4 – stop 3351.3
3) 3232.0 – stop 3227
Statistically, you can play these 3 levels every day and use a 3-7 pt stop depending on volatility. Some traders just take each level once a day as they hit and scale out according to our strategy.
e.g.:
- Order to buy 6 micros at 3375.8
- Move stop to b/e after +5-6 pts (the stop width) and close half the position
- scale another 2 at +10-12
- rest runner for targets.
Here is a map of how this may play out. Note the eventual target:
This is the big picture fractal map we have been following for the last year:
If you wish to see all the buy zones and sell zones for the day session you can log on to ZOOM.US for today: ID 919-562-3357
We offer live actionable trades in the chat room with stops and targets.
For free trials please contact: Marlin@Mrtopstep.com
Closing Prices
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In the Tradechat Rooms
The MiM
Buyers forced in at the end of the day’s MOC. Kudlow was on Fox Business around 3:00 pm and the market began to sell off into the 3:30 pm pivot. While the MiM was flashing great strength early, it waned as the market pulled-back only to find that the last-minute orders were being held back until the closing window of the reveal at 3:50 pm where the locked-in imbalance was actually a 1.4B buy. That news fired off a 3:50 pm HFT capper program and the market recovered past the close to its 2:30 pm highs.
HFT Alert
Signing day was relatively quiet on the program front. If you haven’t been helping us test our HFT Alert beta app, please take a visit at https://h2.fortunesrocks.me:3663/
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Economic Calendar
| Globex | Day Session |
| High 3296.75 Low 3277.75 Volume 219,00 | Opening Print 3282.00 High 3299.00 Low 3281.75 ES Settlement 3293.75 Total Volume 1.4M |
#ES Trump’s China Tariff Deal Victory Lap
I am not going to do a ‘blow by blow’ of the day’s ups and downs. What I will say is that it seems like the recent Globex sessions have proven to be a better trade than the day sessions over the last several sessions. I tried to stay away from being overly bullish or bearish for a few reasons. The first was that I didn’t have a good feel for what was going to happen yesterday and the second part was the PitBull warning that the markets were setting up for a downturn. The two combined made me take a step back from providing my view. I think we all know that S&P 500 futures (ESH20:CME) is overextended but that doesn’t matter. As long as the Fed’s printing presses are printing cash the trend really is your friend. After rallying up to 3299.00 before President Trump’s China tariff victory lap speech that ES started to downtick. During and just after the speech the ES got hit by several small sell programs as the Nasdaq futures (NQH20:CME) got weak. After making a 12.75 handles down to 3286.25 going into 1:00 CT the future caught the short off guard and rallied up to 3295.50 and then back down to 3288.25 just after 2:00.
At 2:30 the ES traded 3294 as the final 2:50 cash imbalance showed 1.4B to buy, traded 3288.50 on the 3:00 cash close and settled the day at 3294.00 on the 3;15 futures close, 6 handles (0.17%) on the day.
In terms of the ES’s overall tone, I said it yesterday and I will say it again, the ES is firm but SKITTISH!! In terms of the day’s overall trade, 1.4M ES traded with 219,000 futures coming from Globex making the day session total only 1.2M.
Chart of the Day
Our View
Put/Call Ratio The Lowest In Six Years
Now that the first phase of the trade deal is done the markets will be looking for something new to key off of and that, my friends, is the 2019 4Q earnings. In most cases, the Wall Street talking heads are warning of weak earnings but most are saying we should see higher guidance. The other thing is the put/call ratio is the lowest in six years. One of the things I have been paying attention to is the late-day price action. Yesterday the ES made a new late-day low by two ticks then rallied on the close and went out at a ‘premium’. What I think is the big institutional funds / ETFs and closing algos just play with the small traders. We see the ES going down, they look bad and then in comes the big buy orders. It is a big game that literally takes advantage of the smaller players. One minute the ES looks like it’s going to continue lower, then in comes the closing buy program.
Our view: We can all fuss and complain about how much the ES has gone up without any significant sell-offs but that’s not going to stop the PPT from continuing to support the markets. I keep thinking we see a selloff/pullback but it’s the same price action over and over, buy the pullbacks. As I have said many times; we are not here to fight city hall and if the ES is going up we want to go for the ride. Our lean is to sell the early rallies and buy the pullbacks. 3304, 3312, 3228, 3324 ON TAP.
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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