CASH opened in the wake of a Globex rally from the lows of (5 min) 3300.50 7:50 | 7:55 double bottom. At 8:35 volume surged just shy of 10K as the support line was violated. Wyckoff would have called that absorption volume. I had S3H Iffy. Iffy due to (here’s what I posted in the IMPRO chat):
The spill was real and sealed at the 3313 handle and looking for the AM HIGH. As 10:30 came into view, Banking, Insurance, Oil, Chemical, Aerospace on high volume was testing the previous day high and other groups.
Fang’s (Robin Hood Trader’s Favorite) AAPL and GOOGL indicated a top.
IMPRO: Wyckoff Trader :(10:38:41 AM) : Bonds are spiking potential center time for the AM window
IMPRO: Wyckoff Trader :(10:40:04 AM) : ticks -653 and getting more negative
IMPRO: Wyckoff Trader :(10:41:30 AM) : if you are S3H potential seal of AM HIGH; window still open
IMPRO: Wyckoff Trader :(11:01:00 AM) : AM TURN window close; looking for mid am low; could see a liquidity vacuum due to lack of bids…
That was a 15 handle drop, just over 15 minutes. The first indication supply was showing it’s hand.
It would have been a great day for the bears had the “liquidity vacuum” not occurred. CASH just gave it up. By 11:40 the MID AM LOW had been found and volume was coming in on the bid. WB would have said: “Bulls dropped the soap!”
WB was a genius the way he set up the S3H day. Either way he wins! I made a video if you want to watch it. Unlike my other videos that are long and arduous. I requested feedback from my subscribers. And got it!
Instead of a long story leading up to the facts, I just start with the facts and leave out the embellishments.
The day ended with a “Rip Your Face Off” all the way up to the last hour high. And that’s how the day should have played out according to the clock. If you want to learn more just watch the short ‘n sweet, to the point 3-minute video on WB’s clock, the clock that controls all turns intraday, every day.
Looking Forward Friday, August 7, 2020
It should be no surprise all traders eyes will be focused on the numbers today. That’s a given. The bigger picture is where and when the “FREE MONEY” will be approved. My friend Chris, the Wall Street Wizard, who is a retired Morgan Stanley Institutional trader, said why not give it to the Americans, when you’ve been giving all the money to the other countries?
I admit, that’s a good way to look at it. His view is; they can’t hold that 27000 in the DOW futures. However, we did touch 27300 in Globex yesterday. If the package is not signed / approved by today or in the next few days we could see a drop. 26000 to 25000 handle. Not my words but his.
If that was the case, then it might make more sense why we’ve been squeezing shorts on little to no volume the past few days. Bid it up higher so that it has less room to fall. By my eye yesterday, I saw volume entering to lift the offers at 8:40 9.9K, 14:05 25K as the price absorbed the 3325 handle.
Will it be a buy the rumor, sell the news type of event? Time will only tell…
I give you the best of the old school market technicians, JP Morgan, Herriman, Kearn, and Livermore. The traders of the 1930s. How they may have seen the market. I use the lens of Richard D. Wyckoff Principles and Procedures and through the eyes of WB’s hidden internal clock. The clock that controls all turns intraday, every day.
We had a good week this week. Not as stellar as other weeks, but I’ll take it! Our subscribers have been very lucky with the levels given: 16 points Monday, 19 points Tuesday, 3 points Wednesday, and 9 points Thursday. Total for the week 47 points, that would be $2,350 on 1 lot and $7,050 on 3 lots.
That’s due to the volatility that crept back into the market. I’ll be the first to say, it does NOT happen every week. When it does it’s a beautiful thing! I would love for you to join us. If you have not taken the time, now would be a great time for you to subscribe.
In the Tradechat Room
MiM showed a buy into the close and the market dutifully went up. Our 15:50 MOC reveal was very small, around $200M to buy that stopped the pause and took us up to highs on the close. Almost a 20 point range on the closing 2 hours.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
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).
Someone needs to give Texas a little push to get them over the edge. CA & FL are making great progress.
We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M) looking at daily deaths, but more importantly, changes in the count.
Media headlines are all about the total death counts and rightfully so. That always picks up at the end of the week as the larger data comes in. We should start to see a dramatic fall in the daily numbers early next week. Our 7-day average should make a definitive downturn on Flordia then Texas and then California.
We are at the end of the week and the big numbers should be coming out over the next 3 days which will establish how we feel about next week.
Over / Under
These are the over/under numbers for today. 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 numbers and actual are also in the table.
|Florida||9,956 / 7,650||252 / 120||9,007||257|
|Texas||8,800 / 7,598||84 / 306||8,839||295|
|California||10,197 / 5,258||194 / 166||8,086||96|
|New York||777 / 703||13 / 6||644||5|
Use today’s number to watch the releases to determine the trend.
Our over/under numbers for yesterday were all under in the new daily cases and in daily death increases except for Texas that went from 84 deaths to 306. We think that is record keeping noise and it will smooth out over time, we hope. We continue to monitor NY as a bellwether for re-infections post major surges. NY continues to be under control.
Today’s O/U numbers should be beaten on daily cases. CA has a very low number for today, again an artifact of record keeping. If they beat that everyone will be surprised, we won’t but as we know, a daily number don’t mean much in trend info.
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 masks!
Chart of the Day
|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3329.00||Opening Print: 3313.75|
|Low: 3307.25||High 3345.50 @ 3:05 CT|
|Volume: 277k||Low: 3310.50 @ 9:45 CT|
|ES Settlement 3344.50|
|Total Volume 1.328 Million|
S&P 500 RECAP – Trade Date 08/06/ 2020
After trading sideways to lower in the overnight session the S&P 500 futures opened Thursday’s cash session at 3313.75 and within the first hour pushed up to 3325.75 printing what would amount to the morning high. From there, the S&P’s pulled back to 3310.50, below the open, for what would be the low of the day, giving buyers their last chance to buy before the index chopped into 11:00. However, late morning the benchmark index began a climb and that would continue through the midday and afternoon and into the final hour.
Late in the day, the ES printed a high of 3344.00 just before 2:30, then pullback to 3336.50 and then climbed past the cash close into the settlement, reaching the high of the day at 3345.50 before settling the day at 3344.50, up 28.50 handles or +0.86%.
The flow of the day was about buying the open, and then the midmorning pullback. Those were the gifts of the day. Otherwise, you were fighting the trend. In terms of volume, the S&P 500 futures traded a moderate 1.328 million contracts traded.
Spin The Wheel; Make A Deal
The White House has stepped up the pressure on the Democrats to get the coronavirus relief deal done today saying that if they don’t come to the table that the president is prepared to walk away from negotiations and use executive actions. My feeling is that the president will take action on his own. In addition to the aid relief this morning, the Department of Labor’s July jobs report is set for release at 7:30 a.m CT. U.S. employers are expected to have added back fewer jobs in July after a record gain in June as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. Below is what the numbers look like :
- Change in non-farm payrolls: +1.48 million vs. +4.8 million in June
- Unemployment rate: 10.6% vs. 11.1% in June
- Average hourly earnings, month over month: -0.5% in July vs. -1.2% in June
- Average hourly earnings, year over year: +4.2% in July vs. +5.0% in June
Our view, there is little doubt that the ES is overbought and overextended. That said, I think today will be filled with lots of rips and dips. I want to get a look at the price action before making any trades this morning. I think it could end up a very volatile trading session.
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
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