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): 3 Day Positive Cycle Statistics were fulfilled as price attempted and failed twice to clear CD2 High. This “double-failure” set up the 2 pm “shake n bake” reversal, which took the price lower into the closing bell. Market on Close Sell Imbalance of $1.6B capped the session, with a range of 38.75 handles and 1.358M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Late day sell-down in prior session settled price at our 2-day Line in Sand (3213) Level. Normal for a CD1 is for some magnitude decline with average measuring 3181. We then have two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3213, initially targeting 3223 – 3233 zone.
2.) Price sustains an offer below 3213, initially targeting 3203 – 3193 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
Economic Calendar
Closing Prices
In the Tradechat Room
MiM
A small MiM hovering around 200M to sell and the revealed initial MOC at 13:50 was -1.3B. Again that 15:50 candle was the high volume candle and retraced in entirety the MOC candle. We should continue to see 1B+ MOCs during the rest of this week.
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.
We were a bit early on the Florida death downturn as we headed back up yesterday as Florida missed its o/u goal of 136 death by putting in 191. It should turn towards the end of this week as new cases continue to fall. Today’s O/U number for FL is 140 which they are likely to exceed. Based on yesterday’s number we could hit that 200 mark.
Texas is back to a normal number since their big add on Sunday but still missed their 131 goal by 33 pushing the 7-day average slightly higher.
California also missed its goal of 61, going over by 12. That 20% increase week over week is troublesome, still expecting to see CA move higher this week.
Over / Under
These are the over/under numbers for 7/28/2020. 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 | 9,440 / 9,230 | 136 / 191 | 9,785 | 140 |
| Texas | 9,305 / 8,342 | 131 / 164 | 9,879 | 197 |
| California | 9,180 / 6,000 | 61 / 73 | 12,807 | 115 |
| New York | 855 / 534 | 2 / 9 | 705 | 10 |
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:
- Chloroquine (a malaria drug) maybe: An Effective…
- Trump on his own yet again as he skips farewell to Lewis
- NYSE Holidays 2020 Stock Market Schedule
- 12-year-old charged in fatal shooting of Texas woman
- Wednesday: FOMC Meeting, Pending Home Sales
- July 28 COVID-19 Test Results
- Republican lawmakers are trying to include $30…
- 4 Schulte Roth partners who rep lenders like…
- Southern Copper (SCCO) Q2 Earnings and Revenues…
- We’ve been tracking big hires and exits across…
- Zillow Case-Shiller Forecast: Year-over-year House…
- Trump administration won’t accept new DACA applications
- Social distancing leads to a drop in child abuse reports
- Gov. argues against Holtec nuclear storage site
- Bloomberg: Five Things to Start Your Day
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 3246.75 | Opening Print: 3223.75 |
| Low: 3215.00 | High 3236.25 |
| Volume: 250K | Low: 3208.00 |
| ES Settlement 3212.50 down 22 handles or -0.68% | |
| Total Volume 1.36 Million |
S&P 500 RECAP – Trade Date 7/28/2020
#ES Grinder
#ES Money Maker Chart
The ES traded 3223.75 on Tuesday’s 8:30 futures open, rallied up to 3230.00 at 8:31 CT and then dropped down to 3212.50 at 8:54 CT. After the low, the ES rallied up to 3230.00 at 9:30, sold back off to a higher low of 3221.50 and then rallied up to 3230.00 at 9:57. After the rally, the ES dropped 10 handles down to 3220.50 and then rallied up to a new high of 3231.50 at 10:16 AM. The ES sold back off down to the vwap at 3226.50 then rallied up to a new high of 3234.25. After the new high the ES sold back off down to 3224.50, back and filled for 20 minutes and then rallied up to another new high of 3236.25 going into 1:00. After the ES made its high, the NQ that was already weak started moving lower. On the 3:00 cash close, the ES traded 3211.00 and settled at 3212.50 on the 3:15 futures close, down 22 handles or -0.68% on the day.
In terms of the overall price action, the ES outperformed the RTY, DOW and NQ until late in the day when the NQ started falling. In terms of the day’s overall trade, total volume was LOW at 1.36 million contracts traded.
Our View
Fed, Jobs, and Tech Earnings
Yesterday the central bank said it was extending its emergency lending programs that were set to end in September to December. Most traders are not expecting any major changes when the fed releases its statement. Thursday the Department of Labor will release its weekly jobless data at 7:30 CT and Facebook (FB), Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL) and Microsoft (MSFT), the five largest US stocks that now account for more than one fifth of the value of the S&P 500, report earnings after the close. Despite the tech gains this year, today’s earnings are being overshadowed by last week when INTC plunged when it said its next generation chips would be delayed and Snap’s stock fell after the company said that a spike in users of the app after the pandemic began was tapering off.
Not many are talking about it but I did mention this last week. The last week in July to the third week in August historically sees an uptick in volatility. How can anyone forget August of 2015 and the China PMI number that dropped the Dow down over 1,000 points? Additionally, the S&P 500 posted 11 moves of more than 1% in 22 trading sessions for August. Those moves included three declines of at least 2.6% as well as the index’s worst day of the year on Aug. 5. It’s hard to predict what will unfold over the next 3+ weeks but my feeling is the risk will go up. I also think the current tech selling is more than likely tied to the negative seasonalities.
Our view, if the ES gaps higher this morning my lean is to sell the open, cover on the pullback and look for the mid-morning low to get long. If that takes place I want to cover and go flat and come back for the fed’s statement and trade the MIM. While we have been seeing lower volume I think today could be more volatile than most people are thinking. I know I keep talking about ES 3320-3340 and I still think that’s in the cards but the ES has to close above 3280.
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
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.
No responses yet