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by Danny Riley
on July 23, 2020

Market Review

Globex

(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 3265.75Opening Print: 3245.75
Low: 3245.50High 3271.75
Volume: 310KLow: 3244.50

ES Settlement 3266.25

Total Volume   1.32 Million

S&P 500 RECAP 7/22/2020

Persistent Tech Selling Remains Focus 

The ES traded 3248.00 on yesterday’s 8:30 futures open and down ticked to 3245.00 40 seconds after the open. After the downtick the ES rallied 26 handles up to 3261.00 at 8:57, it was a take no prisoners rally. The ES then sold off down to 3254.50, rallied up to a lower high at 3260.00 then sold back off down to 3251.50. After the drop, the ES rallied up to another lower high of 3257.50 at 9:53. The ES then popped up to 3254.50 then made a  MrTopStep 10 handle rule down to the low of the day at 3244.50. After the sell-off, the ES rallied 28.50 handles up to 3263.25 and then pulled back to 3247.00 at 12:58. After the drop the ES back and filled and made a sequence of highs up to 3259.00 going into 2:00 and up to 3264.50 at 2:16. At 2:30 the ES traded 3260.50 and traded 3268.50 as the 2:50 cash imbalance showed $2.7 billion to buy. On the 3:00 cash close the ES traded 3268.50 and traded 3266 on the 3:15 futures close, up 16.5 handles or +0.51% on the day.

In terms of the ES’s price action, it was subject to the overall weakness of the NQs but has remained very firm over the last few days. In terms of the day’s overall trade, total volume was 1.3 million which includes 310,000 contracts from Globex making total day volume just shy of 1 million contracts. The selling in tech has been going on since last Friday yet the ES has held up nicely. 

I am not sure how many of you subscribe to the premium part of the MrTopStep Opening Print but as of Friday the price goes up to $19.95 a month, that’s less than $1.00 a day. Currently, it’s $9.95 a month. You may not like the extra cost but you will get to read my view of the ES for that day and 37 years worth of trading floor experience that helped some of the top hedge fund and bank prop traders navigate the S&P. Here is the link Opening Print

Economic Calendar

Closing Prices

In the Tradechat Room

MiM

Early MIM was strong and broadcasted hence the up move from the 14:00 candle. It came in bigger than expected and we put in the high candle of the day and did a bit of a retrace into the close. The closing two hours produced a good 20 point gain.

Questions?  Please email me: Marlin@mrtopstep.com

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

Covid-19

Top 10 Worst
Top Ten Best

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).

Still rooting for FL. They need to get under their over/under today for new cases of 13,965. That seems achievable although the doom/gloom will focus on the growth of new deaths and new high that FL most likely will report.
TX is still struggling with bending that curve. Pace is down which is step one. Today’s over/under of 10,291 will be tough for TX to stay below. Again the top news number for TX will be new deaths, which won’t wane until these numbers do.
CA continues to struggle and will have to put in more restrictions in order to stop this from growing. It is more linear than exponential which like TX, is good, but not preferred.

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.

It is going to be a grim couple of days for Covid numbers. So far they have not had too big an effect on market price action, today will test that.

We had predicted about 200 deaths today for Florida. It is looking more like 170ish as of this morning and that too will be a new record for the sunshine state. It looks like Texas might actually cross the 200 mark before Florida based on yesterday’s bad numbers. CA has that flat new death pinned around 100 which is a bit strange. We would expect that to change direction to the upside.

Over / Under

These are the over/under numbers for 7/23/2020. 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.

YesterdayYesterdayTodayToday
StateCasesDeathsCasesDeaths
Florida10,181 / 9,785112 / 14013,965 / 10,249156 / 170
Texas7,307 / 9,879110 / 19710,291129
California11,126 / 12,807140 / 1158,544118
New York831 / 7059 / 1076911
Yesterday’s number are the over-under number / actual. An actual that is greater than the over-under number will send the 7 day average higher (not good) a lower number will send the 7 day average lower (good).
Use today’s number to watch the releases to determine the trend.

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!
Stay Home!

Chart of the Day

Top Stories on MTS Overnight:

Our View

Silver and Gold, Flight To Quality 

Gold and silver are soaring and the dollar is falling. I’m not 100% sure but does that sound like inflation? Yesterday coffee and lumbers prices rose sharply. I’ll be honest, I do not think I understand all of this but nor do I think the ES cares much about COVID and if the tech seller lights up the ES could be lining up for 3320 this week. Our lean is to sell the gap up open or the first rally above the open, look for a 10+ handle pullback, cover and look for a spot to go long. Call it quits around 11:00 ET and come back and play the MIM.

Gradually. The Unthinkable becomes Tolerable. Then Acceptable. Then Legal. Then Praised.

Maybe some people will care and some won’t but I am considering one of two things; 1 ) closing my FB account or 2) not posting anymore.

Long before COVID19, politics was a source of friction between friends and family on FB. I can’t speak for you but this is not where I want to be in my life, fighting and arguing on FB or social media during the pandemic and riots. I think it’s time that all of us look around, is posting stupid shit on FB and fighting with each other where we want to be? Most of us are in our 50’s and 60s and we made it through every crisis over the last 50 years. Now is not a time for fighting or arguing over petty stuff that doesn’t matter. More now than ever we need to be united, our future and everyone around us futures is on the line. The destruction of our cities and homes are at stake. We have come a long way and now is not the time to cave in, it’s time to unite. I do not have the solution for everything but I know that fighting amongst ourselves is exactly what our enemies want.

Please share…

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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