Market Review
EZ – ZONES
We currently have targets of 3341 and 3345 from the Model on the SPX. The overall target is still 3375, we think we’ll see it next week.
For today the buy areas are:
- 3309 – stop 3307 ( you can use larger depending on your risk)
- 3299.7 stop 3295.8
We advise to take multiple contracts and to scale out to the objective targets of 3345 and 3375.
The Spx is still following our map and should culminate in a last blast by next week before a correction of 100-150 points. Back to 3200 or so.
IF you wish to view the live chart share with the real-time zones and levels join, us today for free using Zoom.
ZOOM.US ID – 919-562-3357
Best,
Gagan Daphu
ES -ZONES
Closing Prices
In the Tradechat Rooms
The MiM
Servers were out in NYC. I don’t have my usual MIM chart but have annotated the last couple of hours of the ES in regard to the MIM. If you learn one thing from me and the MiM it is to watch the action at 3:50 pm ET and 3:55 pm. Every single trading day the NYSE and NASDAQ broadcast their closing imbalances which need to find traders on the other side in order to close the markets. The larger the imbalance the harder the job. Before those times, the NYSE broadcast their indications to floor brokers in order to round up business and help in the closing process. They are broadcast in the form of a symbol and share count needed to pair off. We aggregate that list into a dollar amount.
Yesterday at 2:30 pm we had about $180M worth of stock to sell that needed buyers. Buyers live at lower prices. That jumped to about -500M by 3 pm. At the actual reveal time of 3:50 PM it was -700M. Note the increased volumes at the 3:50 and 3:55 pm bars. That is trades being made based on the imbalance information. It is a very busy time. It occurs every single day. Make sure you are aware and it is part of your trading plan if you trade the last hour.
HFT Alert
Piggybacking on what I wrote above, almost every day the NYSE imbalance data triggers a program at 3:50pm. Check it out.
Economic Calendar
Globex
| GLOBEX Session | Day Session |
| High: 3336.50 | Opening Print: 3331.00 |
| Low: 3319.00 | High: 3337.50 |
| Volume: 261,000 | Low: 3319.50 |
| ES Settlement: 3319.75 | |
| Total Volume: 1.46M |
#ES Drops As #Wuhan #ChinaCoronavirus Kills 17, Infects 540
Have you ever thought that all your skills and trading knowledge would end up all for naught? That after working so hard to learn the trading game that we would end up being bounced around by algorithmic and high-frequency bots that now make up 85% of the daily volume? Where do we place the blame? On the exchanges or ourselves for not adapting to the new world trading order?
When I first meet the PitBull I didn’t even know who he was but after a few months of looking at his trades, I knew he was a standout but today even he will admit that we are totally outgunned. When I went to bed Tuesday night the ES was up a few handles off its Globex low. I was short one contract with another offered at 3332.50. I really had little concern about a big overnight rip but at 9:58 my cell rang and it was the PitBull asking me if I knew why the ES was rallying so much. I asked him if he had FOX business on and he said yes that there were no headlines and I flipped on Bloomberg TV and there were several China headlines stating that China was going to contain the virus and that it was going to work with the international community to keep the lines of communication open. I didn’t know how that could be bullish but it really doesn’t matter what you or I think it’s how the ‘headlines news algos’ react and that’s not something we are capable of knowing. What we do know is that when the markets react to big headlines, whether they are good or bad, the bots move the markets further than they should. This tends to drag the public in at bad prices which only exaggerates the move. I’m one that doesn’t like to hold on to losing positions. When the ES is against me, I always feel like it could keep going and as the losses add up it will only make it harder to get back. Maybe I should hold longer/risk more? Some traders can, I but I can’t seem to be able to do that.
Its 11:30 am and the high in the ES is 3337.50. I covered my overnight position at a 3 handle loss which looked correct but now the ES is just trading back down to a new low at 3324.25. I just posted in the MTS forum that when everyone thinks it looks bad it usually bounces and that’s what it did, the ES bounced up to the 3332 area. After the high, the ES started sold off down to 33 after these headlines hit the tape.
CHINA’S WUHAN SUSPENDS OUTBOUND FLIGHTS, RAIL SERVICES: CCTV
BRITAIN’S FOREIGN OFFICE SAYS IT IS ADVISING AGAINST ALL BUT ESSENTIAL TRAVEL TO WUHAN IN CHINA
WUHAN LOCAL TRANSPORTATION NETWORKS WILL BE SUSPENDED FROM 10 AM ON JAN 23, AIRPORT AND TRAIN STATIONS TO BE CLOSED TO OUTGOING PASSENGERS – STATE MEDIA
I am not going to do the ‘regular’ ES recap. I think most of us know that the ES has gone too far without any major correction but at the end of the day, all I can say is the quarantine of the entire city of Wuhan’s 11 million people is frightening.
Chart of the Day
Top Stories on MTS Overnight:
- BLOCKCHAIN IN BANKING: An inside look at four banks’ early blockchain successes and failures
- Increased Emotet Malware Activity
- Watch for January Effect of Small-Cap Outperformance to Begin Anytime
- Amazon Urges Court To Halt Progress On Microsoft’s JEDI Contract With The Pentagon
- Insiders explain how to navigate Steve Cohen’s Point72 and climb from fresh college grad to managing tens of millions of dollars
Our View
As The China Virus Numbers Rise The S&P Will Fall
Our view: Based on the news and the ES closing on its low of the day we think we see lower prices today. Our lean is to sell the rallies and if the US shuts down flights to and from China the ES will sell off hard.
Market Vitals Technical Analysis
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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