Market Review
This was in the AM TURN today June 12: (above and below)
Edge: Potential gravy in the gap with gap and go with further downside progress, if supply is more effectual than demand
That was in the PROSE and THE NUMBAHS yesterday…
That within itself is not bad, however, the clock foreshadowed yesterday (Tuesday). A potential movement let’s say. The Tuna / Billfish traders would have gone short for the longer-term play.
Nasdaq reaching all-time highs, yea…that will ring the cash register to take profits!
You can read the market by just listening to the words “SECOND WAVE”. Yes Dr. F, not Dr. J Options Wizzard, been hot on the mike. Promoting the next cure for the end of this year. And the FED said “kind words / not so kindly”…
The market opened down -1797 ticks on -91.1 Fair Value. That gave a quick pop to the Banks / Brokerages and a few others, but most just kept moving down looking for an Australian buyer. (FV was -1.6 Adv 133 Dec 2755 that’s like 1 to 20 ratio)
LOOKING FORWARD (from today’s AM TURN)
The weekly pivot is 3135 and currently, Globex is trading just 10 handles above that. After close, price started back down to grandma’s house to find an Australian who was willing to buy it all. It’s just slip-sliding away. We lost that 3180 handle.
Big question is support going to come in at 3131 handle seen on 3-3-2020 marker? To my eye, that’s the next line of demarcation for bulls/bears.
They lost that 3131 handle and then lost the 3031 handle and kept on going down to the 3000 handle.
Price found a bid and now trading at 3020 and holding.
Looking Forward Friday, June 12, 2020
It’s a Friday and the last day of the cycle. We had a good day yesterday. Could more buying come it? Most pundits or shall I say the bigger boys are looking at the 2900 and the 2800 handle as the next value play.
Today could see some more bargain buying.
The news is that we could see a second wave due to the protest that occurred last week. They want it and I guess they are going to get it. We could see more aggressive selling providing the catalyst of the day supports it.
If you want a peek; click on this link:
https://my.demio.com/ref/YEnyH8VSwOFpwODW
It’s thirty minutes. What we did and how we did it. If you want an edge in your trading or just want to hold your trades longer yesterday was a prime example. It was an S3H day with the potential for the low of day to be in or near the last hour.
I gave the level 3114 and yes, we took on a little heat but how the market internals was performing (see the top graphic) and the timing of WB’s Hidden Clock. The clock that controls all turns intraday every day, you would have held it due to the strong bearish whack a mole trend to the end of the day. Total handles yesterday 128 handles. (points)
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MiM
Trend-down-day (TDD). A very trendy down day. The MOC didn’t disappoint with 4B$ to sell at the 13:50 mark, but TTDs by name and when they are as negative as I have seen all across the board (only 1% of stocks volume green) that is a 99:1 down day, that is going to close on the lows or close. Low of the day was actually put in at 15:30 ET with a 20 point run up into the MOC and a return back to the 3000 area.
For our Russell watch, today after the close will be the final list for the Russell 2000 and lockdown will begin on Monday.
List of addtions from last week: https://content.ftserussell.com/sites/default/files/ru3000_additions_20200605.pdf
Reminder: June is Russell 2000 reconstitution month. Here is the schedule for that:
- Friday, May 8 – “rank day” – Russell US Index membership eligibility for 2020 reconstitution determined from constituent market capitalization at market close.
- Friday, May 22 – “query period” begins – preliminary shares & free-float information for Russell 3000 Index constituents are published daily & queries welcomes (query period runs through June 12)
- June 5 – preliminary US index add & delete lists posted to the FTSE Russell website after 6 PM US eastern time.
- June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
- June 15 – “lockdown” period begins – US index adds & delete lists are considered final
- June 26 – Russell Reconstitution is final after the close of the US equity markets.
- June 29 – equity markets open with the newly reconstituted Russell US Indexes.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3188.50 | Opening Print: 3111.75 |
| Low: 3098.25 | High 3118.25 Early |
| Volume: 710,000 | Low: 2996.25 Late |
| ES Settlement: 3010.25 | |
| Total Volume: 3.475M |
S&P 500: Big Drop ‘Triggers’ Circuit Breakers
The fastest % rally in history just came to a screeching halt yesterday. If you do not get the full version of the Opening Print you do not get to see the ‘My view’ part. If you did you would know the tone of what I wrote all week was less bullish. I said a few times this week that the ES and NQ were at extreme overbought conditions and I voiced my concerns about how the big rip in the Nasdaq over the last several days pushed up many of the market-leading tech stock names to new all-time highs on Wednesday. I am not always the best at explaining it but I could sense that the big rotations were starting to have a wearing effect on the index markets. I even posted a chart from the 1999-2000 tech bubble.
I am not going to do a big Opening Print today. We all know what’s going on and I am not going to hammer any of it.
The ES traded 3111.75 on yesterday’s 8:30 futures open, rallied up to 3118.75 and basically crashed, falling all the way down to 2996.25 after the MIM came out showing $4.4 billion for sale. In terms of the ES overall tone, it literally went from great to deplorable. In terms of the day’s overall trade, volume was HUGE. If you took the 710,000 contracts traded on Globex from the 3.475 volume, a total of 2.765 million futures traded on the day session.
Fears of a spike in COVID19 cases pushed investors out of many of the big-name stocks. The Dow fell more than 1,861 points or down 6.9% points, the largest one day % decline since mid-March. The S&P cash closed down 188 points or -5.9% and the Nasdaq Composite fell 527.62 points or down 5.3%.
Our View
COVID-19 CASE SPIKE
You had to know this was coming. It really doesn’t take a genius to know opening up the cities and having thousands and thousands of people in big protest marches across the US was going to cause a huge surge in new COVID cases. From South Carolina to Texas to Florida where nearly 1,700 cases were reported Thursday morning. It was the largest jump in Florida cases since March. Florida governor Ron DeSantis was quoted saying “As you’re testing more, you’re going to find more cases,” DeSantis said when asked about the high number. “We’re doing 30,000-plus tests a day.” I think that’s BS and the current rise in cases in many U.S. states is the result of community transmission, not a boost in testing. Arizona reported 1,412 new coronavirus cases yesterday, far above its recent average of 1,071, which was already a 200% change from two weeks ago and Texas has seen more people in the hospital due to COVID-19 this week than it has at any time during the pandemic. South Carolina has also reported a spike. This is not good my friends.
Our view, what happens after a big drop? In most cases a big pop!!! The big investment firms generally do mid-month rebalancing on the 14th and it’s possible they use today to do it. As I said yesterday, I am looking for the PitBull low the Thursday or Friday the week before the June Quad Witch and I’m sticking with it. Our lean, it’s hard to project lower prices after such a big fall, if the ES opens below yesterday’s low we could see another big drop. If the ES gaps higher (above 3050) I would look to sell the open and then buy the midmorning pull back. After that, I want to get a look at the price action. Just not sure going home long is a good idea.
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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