Market Review
Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
***Written 6 pm Tuesday evening for Wednesday’s trading***
Tuesday’s Session was Cycle Day 1 (CD1): Shallow decline which fell short of the CD1 Average Decline was an early “tell” that bullish bias was well intact, anticipating a strong session with Month & Quarter End respectively. The session fulfilled upside range projections with a Market on Close Buy Imbalance of $6 Billion.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Having fulfilled upside cycle objectives and expectation is for some “back n fill” trade action, we then have two scenarios to consider.
1.) Price sustains a bid above 3075, initially targeting 3090 – 3105 zone with 3 Day Cycle Target 3112.
2.) Price sustains an offer below 3075 initially targeting 3060 – 3050 zone.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet >> Cycle Day 2
Thanks for reading,
PTGDavid
Polaris Trading Group
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In the Tradechat Room
MiM
Two days in a row I missed my screen capture for the snapshot MIM table but it was pretty basic, a large buy from 14:45.
Room Posts:
marlin : (3:03:19 PM) : mim showing 2.4B to buy 94$/80# If you don’t know what that means ask
Dboy :(3:28:25 PM) : hearing larger MiM numbers
At 15:28 Danny heard from his chain that the MOC was going to be larger than what the MiM was currently reporting.. and it was. We hit 6B to buy at one point in the pairing off, that made for a nice 15:50 candle of about 15 points which did it MOC retrace.
Smiles and money made on yesterday’s MIM. See you in the room
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Chart of the Day
Top Stories on MTS Overnight:
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3059.25 | Opening Print: 3038.75 |
| Low: 3044.25 | High 3101.25 on the cash close |
| Volume: 330K | Low: 3037.50 |
| ES Settlement 3083.25, up 37.25 handles or +1.22% | |
| Total Volume 1.65 Million |
Tuesday’s S&P 500 (ESU20:CME) Recap
S&P 500 Finishes Best Quarter in 20 Years
The S&P futures opened Tuesday morning’s regular session at 3038.75, sold off down to the low of the day, 3037.50, after the open and basically ‘rallied all day’. The ES did the early ‘head fake’ sell-off then charged higher making new high after new high up to 3074.75 at 11;20 am CT. After the high, the ES pulled back down to 3056.00 at 12:15 and then rallied 56 handles up to 3101.25 as the MiM jumped from $3 billion to buy to $6 billion on the 2;50 cash imbalance. On the 3:00 cash close the ES traded 3085.25 and traded 3083.25 on the 3:15 futures close, up 37.25 handles or +1.22% and the Nasdaq futures (NQU20:CME) settled up 143.50 points or +1.44%.
In terms of the ES’s overall tone, another late cash close buy program pushed the four major indexes into new daily highs on the close. In terms of the day’s overall trade, volume was slightly higher at 1.65 million.
DATA/HEADLINES: 8:15ET ADP Employment; 9:45ET Markit Manufacturing Index (final); 10:00ET ISM Mfg Index/Construction spending, Fed’s Evans speaks; 2:00ET FOMC Minutes .The release of minutes from the latest Federal Reserve meeting today may offer insights into forward guidance on rates and the balance sheet, and whether central bankers will adopt Japanese-style yield curve control to suppress short-term borrowing costs. China Is Permitting Local Governments To Back Small Banks With Bond Proceeds. MERKEL SAYS WE NEED TO BE PREPARED THAT DEAL WITH UK MAY NOT BE REACHED. Munich Prosecutors Raid Wirecard Offices As Probe Into $2BN Accounting Fraud Heats Up.
TODAY’S HIGHLIGHTS: Global stocks struggled for momentum on Wednesday as improving economic data was offset by concern that surging coronavirus cases in the United States could derail the world’s recovery before it properly begins. The APAC lead was mostly positive, but the sentiment failed to sustain during European hours amid further tit for tat measures between the US and China as China tightens rules on four US media branches. Markets muddle through a data-heavy morning with Xetra and Eurex platforms disrupted by technical issues. Unemployment in Germany surged in June, accompanied by warnings of a slower-than-expected recovery. German retail sales rose sharply in May, reflecting a rebound in private consumption, while a recovery in China’s factory activity offered further signs that the world’s second largest economy may have passed the worst of the devastation caused by the pandemic.
Today: ESU / SPX / DOW : U.S. equities index futures pointed to a negative start to the third quarter amid fresh warnings about the spread of the coronavirus ahead of the release of minutes from the latest Federal Reserve meeting. Futures on the S&P 500 drifted lower after the gauge rounded out a 20% second-quarter surge on Tuesday. E-Mini S&P is down 0.8%, Nasdaq -0.65%, RTY -1.4%, Dow futures -1%. ES has 3056 as initial key support to start today. A settlement below the 50dma in SPX (2989) would set up for a move down to the 2835 area (.382 retrace of the rally).
Our View
1st Trading Day Of Q3
Welcome to the first trading day of July and Q3 and the most ‘hated rally’ ever! While the markets are roaring higher so is something else, COVID19. Yesterday, while stocks were ripping higher Anthony Fauci, the nation’s top infectious-disease doctor told a Senate committee that New coronavirus cases “could go up to 100,000 a day” if people continue to flout advice on social distancing and face masks. Fauci said “It could get very bad. Right now the US is recording 40,000 new cases of COVID19 a day. The rise in new infections is causing severely high hospitalization rates in Texas and California and a threat to the opening up of the US economy while Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday pledged to consider additional relief to prevent lasting damage to labor markets and businesses as states struggle to contain the pandemic.
We live in a confusing time and it seems like the fabric of our society is being ripped apart. I understand there are changes coming but I don’t know how tearing down George Washinton’s statue helps? Don’t people know anything about history? Buckle up my friends, it’s going to be a very long, hot summer.
Our view, I got thrown off by the PitBull’s MOC buying and selling stuff. I should have been more on the ball about the end of the quarter rebalance. That said, I did sell the open and make money on the long side. Our lean, everyone in the business knows that the first trading day of the new quarter is usually extremely bullish. I don’t disagree but if the ES gaps higher on the open today, I am going to sell the open, cover on the dip and look to get long. And then… come back for the MIM at 2:00 and ride that baby. It’s now 7:15 am and the ES traded down to 3062.75 and is trading 3070.50, down 14.25 handles. I think we go back up but my concerns are 1) how much the ES has rallied over the last few days and 2) like I said above, the overly bullish stats that everyone is looking at. According to the Stock Trader’s Almanac; July’s First Trading Day—S&P 500 has Advanced 85.7% of the Time – July’s first trading day is the third-best performing first trading day of all twelve months with DJIA gaining a cumulative 1293.21 points since 1998. Over the past 21 years, DJIA’… if the ES is good it should go right back up to 3105.
Danny Riley is a 39-year veteran of the CME trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.
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