Market Review
Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)
Tuesday’s Session was Cycle Day 3 (CD3): This past Cycle fell within the Memorial Day Holiday with a shortened Futures Session. This set up a “thin-to-win” (a-la Dboy) condition pushing price higher, fulfilling upside 3 Day Cycle Penetration Statistic.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Having closed low in the range but above key support at 2980.75, AND having fulfilled Average Decline Objective of 2993.50, we then have Two Scenarios to consider.
1.) Price continues lower targeting 2967 CD1 Violation Level. Failure to hold this level opens the trap door to the lower 2956 – 2950 3 Day Central Pivot Zone.
2.) Price finds a supportive bid, preferably above CD3 Low (2980.75) securing a low; then rally, targeting 3008 – 3018 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
2 Billion buy. The battle for the vaccines is driving the market crazy. Good news about early vaccines springs up and the markets rally. Reality expresses itself as unlikely and off we sell. Adding to the stability issue is the west vs. China with the US taking a lead role in containing an expanding China and the new normal sometimes does not look too promising. That all hit the headlines going into the closing hour on what had been a strong up day. At 15:50 when the MOC orders are locked we showed 2B to sell, quite strong and the market did move up 10+ points on the ES, but selling took over in the end. That left the last candle of the day, the 15:59 candle, to do all the buying and a 15-point upside rally through the close.
Questions? Please email me: Marlin@mrtopstep.com
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3019.75 | Opening Print: 3016.25 |
| Low: 2980.75 | High 3019.00 Early |
| Volume: 335,000 | Low: 2983.50 Late |
| ES Settlement: 2994.50 +5 Handles or +0.17% | |
| Total Volume: 1.6M |
S&P 500 Futures: 3019.00
Think about how smart the players are. The S&P rallied for over a month, rallies into the Memorial Holiday and gap sharply high on yesterday’s open. Then what happened? There was a big ETF rotation, out of tech and into what the PitBull said was ‘more of the beaten-down stocks’. Personally, I think it makes perfect sense, take some profits on the high flying tech names like FAANG and move the money into sectors that have been beaten down like the airlines’ companies. Let’s face it, in the new world investing order technology is king.
The ES traded 3016.25 on Friday’s 8:30 CT futures open, traded down to 3006.25 at 8;40, rallied up to 3014.25 at 8:45 and then dropped down to 3000.75 at 9:10. After the low, the ES rallied back up to 3013.00 going into 10:00 and then dropped 17 handles down to 2996.00 at 10:47. The ES rallied back up to a lower high at 3012.00 then dropped 28.50 handles down to new daily low at 2983.50 at 2:58.
On the 3:00 cash close, the ES traded 2988.00 and settled at 2994.50 on the 3:15 futures close, up 5 handles or up +0.17% on the day. In terms of the ES overall tone, it struggled against the weakness in the tech sector. In terms of the day’s overall trade, volume was higher than expected, a total of 1.59 million ES futures traded with 335,000 coming from Globex making total day volume slightly higher at 1.265 million futures traded on the day session. Not bad for the first day back from a three day weekend.
Our View
It Could Be A Good Time To Take Some Profits
The PitBull reminded me of what happened in 1987, how the markets crashed then rallied hard and crashed again. Let’s face it, no one really knows where this is going. The Bulls are sitting pretty right now and the bears are growling for the downside. I try to keep this as real as possible. I think there is something rotten in Denmark. As the markets become more ‘extended and overbought’ and there is an increase in COVID19 cases the markets will fall. The other part and maybe more important is the sheer number of jobs lost and the government’s rising debt. As the old saying goes, the markets can run but not hide.
From Twitter yesterday when the ES was trading 3011:
IMPRO: Dboy :(11:00:20 AM): The ES used up a ton of buying power since Friday’s close. The futures ES and NQ are overbought and on new highs. I know the markets look great but I think we could be at or near a short term top, this does not mean the ES cant trade to 3030 + but I think the next 50 handles are down from 3110.
Our view, the quote ‘good news’ is out and the ES is up an astonishing 845 handles from its 2174 low. I am not calling for a full-blown top but I do believe the ES and NQ are extended and any actual good news was sold yesterday. I see two scenarios; one, the NQ breaks yesterday’s 9372.75 low I think we could see a quick reversal. After the S&P made its low back in 1987 it rallied for like 3 weeks then rolled over and made a trading low in week nine. Right now we made the low 9 weeks off the March low. If I am right and we gap below yesterday’s low you can say sayonara. The other side of the trading card is the ES just grinds higher. My gut says we are going down.
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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