Market Review
Who would have thought? Yes, seasoned traders thought. NASDAQ hitting all-time highs earlier in the week. I saw GOOGL just get pounded with large size the day before and talked about it in my Market Recap video. Danny said on the Squawk and I even had it in the AM TURN
The market was like that house animal that normally snaps back after every defeat. Today showed it’s getting long in the years and long in the tooth as every trader came to its rescue by trying to catch a falling knife…
FANG’S were just getting pounded. Trader Dave suggested we look at the 5 minute bar with 20K hitting the bid and a few minutes later, I started to hear AAPL 5K, 1K 1024 on my Tape Reader as Emini started to increase to 30K on the five minute bar hitting the bid. SPY in the background hitting 1024K. Normally, on the other side. Today they were hitting the bid…
IMPRO: Wyckoff Trader :(1:55:02 PM) : AAPL just keeps hitting the bid, it’s painful, 1K, 5K 750 each second
IMPRO: Wyckoff Trader :(2:08:09 PM) : Did Warren Buffet now decide to liquidate his ownership in AAPL?
Came to mind as NFLX and GOOGL also started to toss over 1K shares to the crowd like a rock star tosses guitar picks and red roses to an adoring fan. Websites keep showing Mr. MUSK face with billions and billions of market cap. I thought this just ain’t right as the first lurch throwing Momma from the train was seen.
And then 30K on the five minute at
[Trader]: Wyckoff Trader :(1:51:24 PM) : 13:45 30K ???
[Trader]: Wyckoff Trader :(1:51:35 PM) : on five minute
[Trader]: Wyckoff Trader : Now 35K on five minute at 14:05 still traders trying to catch that falling knife…
This had all the earmarks of a top. And when did the fall start? Just as the Lunchtime SLOG rang the dinner bell.
A tight trading range started to form between say 3220 and 3230 from 2:00 pm to close. The day ended 56K on the last five minute bar…Overnight Globex is becoming the tail that wags the dog…
From the past few days, Globex has been setting the high water mark for the buying pressure to follow. What that means as a trader is you have an established supply trend line to follow. Now, as price opened yesterday we had a potential oversold position. So the first level I gave 3259 had little time.
The day type was S1H with odds on the spill and last hour. WB would normally flip it, now you know why! I felt that the Composite Man would at least touch the supply line and the normal opening balance ended around 9:40 but spilled over to the 9:50 marker. That gave us a 10-handle run.
After 10:00 some news hit. The employment number was at 8:30 so the market was already in the “hit the bid” mood. The next level 3254 given was hit, you’d have to go in about a point before the 10:23 marker. We got another 10 handles as price moved up from there.
A few minutes after the PEON closed, the line of demarcation was overtaken by the buying pressure. Let’s call it 3266 handle And it became a fight in the message queue to see who could move the needle North or South.
And then came the China / AAPL news, the needle started to move South really, really fast! AAPL, GOOG, and the other FANG securities started hitting the bid…
I’ve made a special video just for Friday’s Opening Print readers. I made a really detailed video for the AM SUBSCRIBERS. I’ve taken the snippets out and have given you the highlights.
There are not many places where you can see the FANG index. I’m one of the few. I create the index for my charting program. If you’d like to see the special FANG video I’ve put together—just for you. Here it is!
The first video I made for my subscribers was two hours and 13 minutes. The second one was for one hour. Yea, I go into great detail…
You’ll love this one. It’s the best of those; it’s only 18 minutes. Ok, it might be a little longer than 18 minutes. More like 42 minutes. It goes into great detail why FB, AAPL, NFLX, and GOOGL have been leading the market. Remember NFLX was the whipping boy just a few days ago with large size exiting the market?
FYI I just finished it. I gave you the “full monty”. In it you’ll see the potential levels or a bid in the market using Wyckoff’s and Old School Barcalounger Trader eyes. You’ll have to see to understand and believe it…
The day ended at the top of a ten-handle range. 3228.75 was close by my eye. Currently GLOBEX is trading 3234 handle. If your risk manager did not liquidate your position perhaps your stop did?
Yea, WB would have flipped. And I normally would have flipped it too. The day ended as S1L by my eye!
Looking Forward Friday, July 24, 2020
Yea, it’s now much later than when I first wrote that. Price dipped down to 3199 from the overnight fall from 3239 high. If you did not take off your trade, you might have a little pain come sunrise? Price is drifting down. The DOW futures have dipped down to the upthrust on July 6th and Bloomberg is sending out alerts on iPhone apps that China has closed the doors to the US consulate in Chengdu way.
We’ve had seven trading days to take out the highs. On the DOW futures they can not take out the 2700 handle. On the Emini futures that push up overnight on July 12th and the push up on July 20th aka 3192 handle seems to be holding at least for now…
By my eye, we’ve got this major supply line working itself out. The high of July 23rd around 3:30 on Globex handle 3287.75 seems to be the upthrust after distribution. It could have been a terminal upthrust had the market traded for 3 months off that level. You know, however, it’s 2020, not 1930 and price has less time to trade in a defined range now.
We had a good week this week. Our subscribers have been very lucky with the levels given: -4 points Monday, 7 points Tuesday, 10 points Wednesday, and 20 points Thursday. Total for the week 33 points, that would be $1,650 on 1 lot and $4,950,400 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.
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
Great volatility in a sideways move into the close. No real trend set up, the MIM was a buy early and slid negative with an initial 15:50 MOC of about 1B to sell. That sent price down about 8 points while the 15:55 return trade headed back up into the sideways channel.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
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 quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).
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.
Florida came right in on our revised 170ish number for deaths yesterday. Originally we had predicted over the weekend seeing a 200 daily number from FL but the pace has slowed and we would today expect to see about 150 to 160. A downside beat for 130 would turn the FL chart to the downside. We don’t expect downside beats to start showing up until next week.
Texas is a mess and we could see that 200+ number today. The O/U number is 174 but anything under 200 would be a slowing of pace at least for the state.
California takes the lead in new cases and blew out the O/U number on new cases and deaths yesterday. It has been pinned below 100 new deaths on the 7-day average, we expect that to change today with 150+ new deaths.
Over / Under
These are the over/under numbers for 7/24/2020. 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.
| Yesterday | Yesterday | Today | Today | |
| State | Cases | Deaths | Cases | Deaths |
| Florida | 13,965 / 10,249 | 156 / 170 | 11,466 / 12,444 | 130 / 133 |
| Texas | 10,291 / 9,507 | 129 / 173 | 14,916 | 174 |
| California | 8,544 / 12,040 | 118 / 157 | 9,986 | 130 |
| New York | 769 / 811 | 11 / 13 | 776 | 11 |
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!
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Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3284.50 | Opening Print: 3264.50 |
| Low: 3258.50 | High 3271.75 Early |
| Volume: 266K | Low: 3214.25 Late |
| ES Settlement 3226.50, down 40.25 handles or -1.23% | |
| Total Volume 1.68 Million |
S&P 500 RECAP
Trade Date 7/23/2020
Weak Economic Numbers And Heavy Tech Selling
The ES traded 3264.25 on yesterday’s 8:30 futures open and sold off to 3260.50 seconds after the opening print. After the dip, the ES rallied up to 3272.00 at 8:55 am and then sold back off down to 3254.00. The ES then rallied back up to a lower high at 3269.25 and then sold back off down to a higher low at the 3257.50 area at 10:05. After the pullback, the ES ‘back and filled’ a bit and traded back up to 3271.25, three tick shy of the earlier high and that’s when the NQ started accelerating to the downside. Initially, the ES sold off 18 handles down to the earlier low at the 3254 level, popped back up to 3261.25 at 1:05 and another wave of heavy tech sell programs started pushing the NQ sharply lower and took the ES for the ride down. At 2:00 CT the ES traded 3228.25, traded 3222.50 at 2:30 and traded 3222.00 as the 2:50 cash imbalance showed $1.2 billion for sale. The ES sold off down to a new low of the day at 3216.25, traded 3229.00 on the 3:00 cash close and settled at 3226.50 on the 3:15 futures close, down 40.25 handles or -1.23% on the day.
In terms of the ES’s price action, the continued weakness in the NQ dominated the S&P. In terms of the day’s overall trade, total volume was higher at 1.68 million contracts traded.
Our View
Nasdaq Futures (NQU20:CME) Down 553 Points or -4.10% In 3 Sessions
My sharpshooting has not been so great the last few days. I made three trades yesterday after the open, two of which made me over $1,800 and then I did what I said I was going to do, I pushed away from my computer at 11:00 ET. I came back to my PC around 2:00 and then fell back to my old ways of over trading and increasing my size. After losing my gains and down on the day I ‘chipped’ my way back to positive. I’m not happy about how things went and I will be taking a much more cautious approach today. All I can do is try harder.
US / China Consulate Row
Our view, yesterday’s weak economic data and the ongoing US / China consulate row reached new heights just after 11:00 PM last night when a headline hit saying China’s Foreign Ministry will ask the US to close its Chengdu China consulate. After making a 3239 high on Globex the ES pulled back and then sold off hard after the headline and made new lows at 3199.25 after Europe opened.
Its 3:20 am CT and the Shanghai Comp is down 3.86%. The CAC, DAX and FTSE are all down about 2%. One of the PitBull’s trading rules is that the volatility tends to surge going into the last week of July to the third week in August. I have seen this happen many times over the last several years. Are the highs in? I don’t think so but with the markets up so much since the COVID19 lows and the NQ down 5.5% in 1/2 days and so much global uncertainty it’s clearly on people’s minds.
After being up 12.5 handles on my 2 ES longs I got out with a 9-handle loss. I have learned that when I go from a winning streak to a losing one it’s best to get back to the basics, trade smaller and tighten up the risk. If you put a gun to my head I would say the next 30 handles this morning are going to be up.
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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