Market Review
Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
***Written 7 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 3 (CD3): Overnight rally during Asian Session fulfilled upside targets, but throughout the RTH Session selling pressure mounted, pressing price to lows of the session at end of day.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Part of the CD1 Average Decline (75 handles) is in-place with previous session’s sell-off. We then have two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3133, initially targeting 3148 – 3158 zone.
2.) Price sustains an offer below 3133 initially targeting 3120 – 3108 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 1
Thanks for reading,
PTGDavid
Polaris Trading Group
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MiM
Selling close. Our MiM was showing sell all the way but not strong until the reveal where at the last minute, orders were put in just before the 15:50 cutoff. That published a 1.3B sell imbalance which shaved about 8 points off an already cascading sell into the close. Our 15:55 countertrade was not able to retrace the previous 5 minute but there was some green there.
Questions? Please email me: Marlin@mrtopstep.com
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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 quick as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).
New Mexico made our top ten worse with some early detection death slope change. While the new cases are pretty obvious the deaths has just a slight shift up at this time. That shift was enough to put it on the watch list. Two or more deaths in today’s number will most likely keep New Mexico on the top list.
Texas deaths are also following the new surge as the 7 -day average is now 36, just 2 from the high of 38 established on May 15th.
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 stat.
Wear your mask!
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3184.00 | Opening Print: 3154.25 |
| Low: 3138.25 | High 3174.50 |
| Volume: 305K | Low: 3132.50 |
| ES Settlement 3136.00, Down 1.03% | |
| Total Volume 1.31 Million |
Stock Market Exhaustion
The ES traded 3154.00 on yesterday’s 8:30 CT futures open, down ticked to 3148.25 and then made a sequence of higher lows and higher highs trading all the way up to 3169.50 at 9:18. After the high, the ES dropped 10 handles down to 3159.50 and then rallied up to a new daily high of 3174.25 going into 10:30 am. After the high (like the rip), the ES made a sequence of lower highs and lower lows down to 3149.75 at 1:40. After a small rally up to 3145.25, the ES sold off down to a new low of 3145.50 at 2:15. The ES traded 3141.00 as the 2:50 cash imbalance showed $1.2 billion for sale, traded 3134.00 on the 3:00 cash close and settled at 3136.00 on the 3:15 futures close, down 32.50 handles or -1.03% on the day.
In terms of the ES’s overall tone, it acted tired after the early rally. In terms of the ES’s overall trade, there were only 1 million futures traded at 1:52 with 305,000 coming from Globex. Total end of day (EOD) volume was low at 1.31 million.
Our View
Gloomy Economic Forecast
I had a difficult time trading yesterday. When I look at my view / lean I was right about selling the rallies but I tried picking the top buy getting in and out with small losses but by the time the ES really started heading south in the afternoon I tried my late day MIM buys and again got shook out. That’s the way this game goes, one day you’re a hero and the next day you’re a chump. Trading for me is all about volume and price action and I just couldn’t get things to line up. So… as they say, on to the next!
Our view, if the ES opens lower I want to buy the open. Ideally, that’s the trade I feel most comfortable with. That said, it’s 8:50 PM CT and the ES just traded up to 3149.75 and is trading 3147.50, up 12 handles, so not sure that’s going to work this morning. Our lean is to sell the early rallies and buy the pullbacks. If the ES does sell off, 3110-3120 could be the next area on the downside and on the upside, I have 3168-3170.
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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As always, please use protective buy and sell stops when trading futures and options.
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