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on March 11, 2020

Market Review

Polaris Trading Group: Taylor 3 Day Cycle Commentary Author: David D Dube (PTGDavid)

Historic decline pushing indexes Limit Down greater than 5% was one for the record books, even for the most seasoned trader like me (36 yrs). ALGO’s did all the work unlike the manual trading that took place during October 19^th (1987) Black Monday. Yes, I was there as an apprentice trader…You could say it was a “rite-of-passage” in the trading business. I hope if you are reading this commentary and have survived unscathed or with some small bumps ‘n bruises this is now your “rite-of-passage”. WELCOME TO THE JUNGLE!

Prior Session was Cycle Day 3 (CD3)…Price found a solid response at the lower CD3 Violation Zone between 2696 – 2703, as buyers aggressively bid price, rallying 182 handles by Cash Open. Back ‘n forth action within value ended the session by notching new session high.

This leads us into today’s Cycle Day 1 (CD1)…Normal for CD1 is some magnitude decline (that’s an understatement!), but given the bullish momentum into the close, expectation favors continuation, but not ruling out some “back n fill” price action. Bulls MUST recover 2898 handle sometime during the session to negate “failed cycle”…Nasdaq (NQ) was successful in fulfilling Positive 3 Day Cycle, so now it’s “Job-One” for S&P (ES)

Link to access full Cycle Spreadsheet >> Cycle Day 1

Thanks for reading,

PTGDavid

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

Buyers at 3:30 pm ET. Surprise! Every day this week. Despite an early $-1B to sell, the markets rose. Our reveal was a buy of almost $1B which lasted into the close.

Get the skinny when we get it. Join the MiM.

HFT Alert

Programs are slowing down, just 171 yesterday, 90 buys and 81 sells. All the activity yesterday was around 3 pm ET.

Chart of the Day

Globex

(ESH20:CME) GLOBEX Session	(ESH20:CME) Day Session
High 2879.00	Opening Print:
Low: 2695.25	High: 2884.75
Volume: 750,000	Low: 2728.50
	ES Settlement: 2863.50
	Total Volume: 3.3M

S&P 500 Futures: From LIMIT Down / LIMIT Up On Trump’s Stimulus Bill That Won’t Get Passed

The ES traded down to 2695.25 after the ES closed yesterday and rallied all the way up to LIMIT UP at 2879 and opened yesterday’s regular session at 2840.25, traded down to the 2832 area and then popped up to 2846. After the rally, the ES sold off down to 2808.75 and then rallied up to the 2840.00 level. After the push, the ES sold off down to new lows at 2728.50 at 10:38. The ES then short covered up to 2766.50 then back down to the 2740 level and then rallied up 2795 at 11:16 AM and then back down to 2752.00 at 11:34. The ES then rallied back up to the 2766 level and then pulled back down to the 2753 area and popped back up to the 2785 area then back down to the 2765 area then back up to 2798, sold back off down to the 2755 area and traded back up to the 2800 level and then a headline came out at 1:39 saying: DEMOCRATIC SENATOR GILLIBRAND SAYS RELIEF PACKAGE SHOULD PROVIDE TWO WEEKS OF PAID SICK LEAVE and the ES rallied up to 2830.00.

At 2:00, the ES traded 28 as the early MiM showed $1.4 billion for sale, traded 2838.00 at 2:30 as the MiM showed $1.2 billion for sale, traded 2864.00 at 2:50 as the final cash imbalance MiM flipped to $800 million to buy then the MiM went to $1.2 billion to buy and the ES traded up to 2878.75 at 2:56.On the 3:00 cash close, the ES traded at 2880.50 and settled at 2863.50 on the 3:15 futures close, up 130 handles or +4.76% on the day.

In terms of overall tone, the news was bad but the ES shrugged it off and closed sharply higher. In my humble opinion, the ES was very oversold and most of the buying was short covering. In terms of the day’s overall trade, total volume was OK at 3.3 million with 750,000 coming from Globex making the total day volume 2.55 million contracts traded on the day session.

Our View

No Stops Go Untouched In The S&P 500 Futures

The ES made a low of 2695.25 at 5:00 CT Monday night and made a high late yesterday at 2884.75, that’s a 190 handle rally in less than 24 hours. And if you take yesterday’s day session low of 2728.50 at 11:40 to the 2884.75 high, the ES rallied 156.25 handles in 5 hours. MrTopStep has a few trading rules that we really think fit the current trading environment: 1) these are not our father’s markets or charts and, 2) an oldie but goodie, no stops go untouched in the S&P 500 futures.

I had a feeling with all the stimulus talk that the ES was going to rally but not as much as it did. The PitBull said the QCHA was 41 late in the day indicating the ES would probably really more today. Our lean, the markets can run but not hide from the coronavirus spread. I think today could be an up day but if you’re looking to get long be patient and buy the pullbacks that could be anywhere from 60 handles or more.

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.}

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