Market Review
Last week in the MTS Opening Print, I wrote “there is a pronounced low-volume area centered around 3150 and it’s possible the ESU20 may settle in for a week or so filling in the low-volume area instead of moving towards new short-term highs”. That is how last week played out with the ESU20 consolidating between 3105 and 3165, filling in the low-volume area.
I also wrote last week, “If the ESU20 can clear 3150 (i.e. hold a retest of the area as support or move significantly higher), the ESU20 should attempt a retest of the 3220s swing high resistance…” On Monday, the ESU20 moved higher and tested the 3220s with a move to 3226.25 before selling off hard the last 2 hours of Monday’s US session back into Friday’s range. The move creates a ESU20 double top which is short-term bearish.
Tuesday morning should provide clues as to whether the afternoon selloff needed a pullback or the start of a much bigger bearish move down. The key will be the 3105s, the bottom of last week’s consolidation area. If the ESU20 clears the 3105s, then we could be looking at a retest of 3000. There are a couple of areas of support between 3105s and 3000, (structural support = 3062s and 3030s), so momentum on a down move is key to whether 3000 is reached. If 3000 is cleared, the next structural support is the 2923s.
To the upside, Monday’s 3226s high is the key area of resistance for the bulls to clear. If the 3226s can be cleared, then the next stop is the February all-time highs around the 3350s.
Over the last week, ESU20 volatility has inched back up during the consolidation and remains elevated. This week could provide some significant price movement, to either the downside or the upside. Movement to the downside should be quicker if the ESU20 continues to move that way.
Below is a snap of the ESM20 daily chart with the above support and resistance numbers marked for reference. Thanks again for reading. For more information on how DTG can help your trading, visit us at DiscoveryTradingGroup.com
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
MiM became 2B sell at the 15:50 pm reveal, which the market did not think too much about as it sold off about 5 points on the news and then retraced that when the quotes bought back almost all the imbalance.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Covid-19
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).
Cases, cases, cases. Yes, we have a lot of cases but what is happening? Is there a valid explanation of why the USA reported 65,500 new cases but only 465 new deaths?
Compare that to our past daily new death peak on April 21st where we reported 4,700 new deaths while adding 40K new cases. Why is it 10x less deaths now with 20K more cases? Yes that will change most likely, but something is very different this time around. That is news.
All 3 states now have a slowing up-trend in deaths, today will show us if it is sustainable. Florida’s deaths started showing a down move on the 7 day average. Today’s over/under numbers are updated below and under numbers today will be needed lower to keep that downside trend going. Early days.
Over/Under
These are the over/under numbers for 7/14/2020. 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 number and actual are also in the table.
| Yesterday | Yesterday | Today | Today | |
| State | Cases | Deaths | Cases | Deaths |
| Florida | 6,366/12,624 | 63/35 | 7,347 | 48 |
| Texas | 5,318/5,655 | 18/43 | 10,028 | 60 |
| California | 11,529/8,358 | 6/23 | 6,090 | 111 |
| New York | 918/557 | 8/10 | 918 | 8 |
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 mask!
Chart of the Day
Top Stories on MTS Overnight:
- Oatly scores $2 billion valuation and backing from…
- Tuesday: CPI
- Is AstraZeneca (AZN) Stock Outpacing Its Medical…
- Top Leveraged ETFs of Last Week
- NYSE Holidays 2020 Stock Market Schedule
- A Method Traders Can Use to Confirm an Elliott Wave Count
- Iraq in chaos: What will it do to oil
- Cabrera Capital Daily Game Plan
- POC: Powerful levels for intraday swings
- MBA Survey: “Share of Mortgage Loans in…
- Bloomberg: Five Things to Start Your Day
- Should Invesco Defensive Equity ETF (DEF) Be on Your…
- Try These ETF Strategies as the Coronavirus Crisis Worsens
- Spirit Realty’s (SRC) Q2 Rent Collection…
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3154.25 | Opening Print: 3202.50 |
| Low: 3111.50 | High 3181.25 |
| Volume: 380K | Low: 3140.25 |
| ES Settlement 3150.50, down 29 handles or -0.19% | |
| Total Volume 2.1 Million |
S&P 500 RECAP – 7/13/2020
MOC Sell $2 BILLION
The ES traded 3202.25 on yesterdays 8:30 CT futures open, traded up a few ticks and then stutter-stepped its way down to 3191.00 at 9:02. After the low, the ES rallied exactly 20 handles up to 3211.00, then traded back down to 3203.25. After the pullback, the ES traded back up to 3222.50 going into 10:30 CT. From 10:38 to 11:09 the ES back and filled in a 5-handle range then rallied up to the high of the day at 3226.25. After the high, the NASDAQ started to sell off; TSLA fell over 200 points from its high and AMZN was over $80.00 off its high and the ES tanked down to the 3201 level, rallied back up to the 3209 level and then sold off down to new lows of 3187.25 at 2:15 and then down to 3171.50 at 2:25. After a small bounce, the ES made new lows of 3151.25 at 2:34. The ES bounced back up to the 3159 area, traded 3145.75 as the 2:50 cash imbalance showed $2 billion for sale, traded 3144.50 on the 3:00 cash close and settled at 3150.50 on the 3:15 futures close, down 29 handles or 0.91% on the day, off 66 handles from the high.
In terms of the ESs overall tone, it looked great until a very oversized sell program hit the tech stocks that dragged down the NQ from sharply higher to sharply lower. In terms of the day’s overall trade, volume was brisk at 2.1 Million contracts traded.
Our View
When The Music Stops
- California Pulls Back on Reopening Amid Surge in Coronavirus Cases
- Stock Rally Loses Steam in Volatile Session
- THE FEDERAL GOVERNMENT INCURRED THE BIGGEST MONTHLY BUDGET DEFICIT IN HISTORY IN JUNE… THE DEFICIT HIT $864 BILLION LAST MONTH !!!
The day started out with the Asian and European stock markets trading higher, the S&P higher, and the metals up and the VIX down but none of that lasted all day and as more negative news hit the tape the Nasdaq reacted in kind, it PUKED! Over the last few weeks, the markets have been very resilient as the COVID-19 cases increased in many states. The Dow and S&P have surged more than 40% since late March, though they remain down nearly 12% and 7% from their February records, respectively. While the Nasdaq was ripping to new all-time highs big-name stocks like TSLA up over $200 and sold off $250. Almost 40,000 Robinhood accounts added shares of Tesla during a single four-hour span yesterday (that can’t be good). AMZN made a high at $3,344 and made a late-day low at $3,068 off $266 from its high. Let’s face it, the PANDEMIC is back and a survey done by UBS shows investors are worried about staying liquid during another lockdown and that they may not have as much cash to pass along to their families.
There is a record level of stress and anxiety out there right now. Stocks have rallied sharply and COVID cases are rising at a record pace. Can the markets withstand another round of US cities being locked down again? This is something I warned about several times. Can the markets hold up? I’m not sure but when you take the surge and combine it with companies in the S&P expected to decline nearly 45% from the second quarter of 2019, which would mark the steepest year-over-year drop since 2008, I would have to say you have to be on your toes. Over the last few years, August has been a time when the markets start to pull back so maybe after the earning we start to see a real let down. Only time will tell.
Our view, I said this would be a volatile week filled with uncertainty and it started out with a bang. Yesterday the overall price action was very negative. If the ES starts trading under 3140 it could be a quick trip down to 3108. If the ES holds after the open I think we could see a quick rally up to 3180 -3190.
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.
Market Vitals Technical Analysis
Did you know that your premium membership gives you access to our Market Vitals? Click on the image below and get today’s key levels.
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.
No responses yet