Premium OP: Trump’s Having a Barrel of Fun

Commentary, News, Our View, The Opening Print

Market Review

This is where it all started. Ground Zero. I wrote this on Monday, Jan 21, 2020, in the AM TURN.

On Jan. 31, ten days later, this is what the experts had to say:

Earlier in the day, the U.S. confirmed its first human­ to human transmission of the virus, which has killed 171 people in China and has spread to as many as 18 other countries. The virus has reportedly infected more than 8,100 people so far, outnumbering the infections seen during the entire SARS outbreak of 2002 and 2003. However, Tedros said the WHO wasn’t recommending “measures that unnecessarily interfere with international trade or travel”.

Yesterday (Apr-1) I attended a town hall meeting via phone and Trump stated that up to 140,000 to 240,000 or more deaths are to be expected in the USA. Last week in the AM TURN, I made a prediction we’d be at 1,000,000 infections by Friday (Apr-3) and today Apr-01 is 918,126 and climbing.

Our thoughts and prayers go out to anyone who may be affected/infected by the devastating virus that is spreading. Last check, 1,018,985 infected with at least 53,292 deaths. That’s up 485,970 infections and 29,197 deaths from last Friday.

Pull Jan. 21 up on your daily chart and you will see 3330 down to 3308, a 22 point trading range. Then a dip down to Jan. 31 low of 3212.25 and then a grid up to Feb 20 at the high of 3397.25 handle. Notice the range on that day, 53.50 handles down. Wyckoff would have called that a terminal upthrust. And terminal it was…

To the tune of one million people now. And that number will climb! Currently, we are looking at rallies to lower highs. That  2525 handle looks to be the demarcation line for the buying pressure. Yesterday we had an 84 point trading range. That’s 3.8 times more than Jan. 21 when only four folks in Asian lands ended.

Currently, Globex is trading off yesterday’s high of 2525 down to 2498 by my eye (it keeps going up). Keep in mind the humans are not in the pits. They are trading at home like you and I…I’m thinking some traders are at the exchange, but mums the word. Get ready for some rough rides, black slopes if you’re in Colorado. I think we are at sixty-nine deaths now…

LOOKING FORWARD — FRIDAY, April 3, 2020

We got the big weekly employment number out of the way. What was it 3,000,000 plus folks? It’s up to 6,650,000 and climbing. And what did the market do? It rallied. First, it ripped down, found a liquidity vacuum and then just ripped up to 2525 handle that is. The question might be who wants to go home long on a Friday?

The excuse was the oil. I believe below $25 a barrel is a losing proposition to get it out. We are doing in one day what would often take four to five days or a week or more in the Emini. VIX is at 50. 

Globex seems to have found a bid at the 1:35 marker at 2474 handle. The big even 2500 seems to be checking the rally.  The bigger hurdle by my eye would be 2512 where the fall through ice occurred. And then of course 2525, that is if you favor the side of da bulls.

Da bears would need the 2482 and then the 2474 taken out and left behind. Usually employment Friday is a big day that echoes out to Monday. Perhaps this may be the first where it is not as much a factor in the bigger picture.  Yea, we are in a trading range.

As you can see this is issue number 642. I’ve written 642 issues and have given our faithful subscribers over 4,344 points to date with 628 trades since August 8, 2018. Just this week our subscribers have been very lucky with the levels given: 52 points Monday, 14 Tuesday, 76 points Wednesday, 76 points Thursday. Total for the week 218 points, that would be $10,900 on 1 lot and $32,7000 on 3 lots. That is if your brokerage firm allowed you to take every trade.

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.

Click the link below to learn more.


Economic Calendar


Closing Prices


In the Tradechat Room

MiM

I am working hard on bringing our Naz and new MOC data online, somewhere along the way it appears I may have broken the Snapshots chart, no minute by minute chart of the MIM today.  I did snap a pic of our chart yesterday going into the close. Buyers joined the afternoon buying spree at around 3:38 and we had some nice updraft. Momentum was waning in the 5-minute call for the MOC and for a market that wanted to close in the highs, it was in need of some upward push.  At 3:50 pm ET our MOC lit up with 2B to buy and off she launched into the close. Not sure we tagged the high of the day, but a good effort. There is still a lot of money going into the markets as they are forced to buy for the beginning of the month. Let’s see if that carries over another day. 

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


Chart of the Day


Top Stories on MTS Overnight:


Globex

(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 2502.00Opening Print: 2447.75
Low: 2424.75High 2525.00
Volume: 450,000Low: 2441.25

ES Settlement: 2516.75


Total Volume: 2 M

S&P 500 Futures: 2nd Day Of The 2nd Quarter Markup

The ES made a low at 2445.75 and a high of 2502.00 during Wednesday night’s Globex session and opened Thursday’s regular session at 2447.75. The ES traded up to 2475, pulled back down to 2441.25 in the first 15 minutes of trade. After the low, the ES traded up to an early high at 2523.00. After the high, the ES sold off down to the vwap at the 2486 area, traded back up to a lower high at the 2515.50 area around 11:15 CT, pulled back down to the 2500.00 area, made another lower high at the 2512 area then puked down to 2456 just before 1:30 and that ended up the low for the afternoon. The ES traded up to 2494.75 at 2:00, traded 2491.00 at 2:30 and traded 2511.00 as the 2:50 cash imbalance showed $2 billion to buy. On the 3:00 cash close, the ES traded 2516.75 and settled at 2516.75 on the 3:15 futures close, up 59 handles or +2.43% on the day.  

In terms of the ES overall tone, it was firm backed by large ETF / mutual fund money being out to work on the second day of the new quarter. In terms of the day’s overall trade, a total of 2 million ES traded with 450,000 of the volume coming from Globex making total volume on the day 1.55 million contracts traded during the day session.

Our View

Trump’s Oil Play And The Putin HOAX

Trump started talking about the low price of oil a few days ago and like all his actions he took it to the market. Yesterday Trump sprang into action by tweeting that he expects Saudi Arabia and Russia to reach an agreement to significantly cut production and that he ‘just spoke to his friend the crown prince of Saudi Arabia who spoke with President Putin of Russia and I expect and hope they will be cutting back approximately 10 million barrels and maybe substantially more, if it happens, will be GREAT for the oil and gas industry’ But like many of his big friend gestures news agency Sputnik reported that Kremlin spokesman Dmitry Peskov refuted Trump’s claim about a phone conversation between Putin and the Saudi crown prince. “No. There was no such conversation,” Peskov said when asked if Putin had a phone conversation with bin Salman, the news agency reported. At one point the (CLK20:CME) traded above $27.00 before falling back below 2350 and rallied back to the $25.00 level near the close. I understand that President Trump wants to save the US oil fracking industry before they default on their bank loans but I seriously doubt he can stop the low level of demand for oil nor can I believe the Russians or the Saudis will abide by any agreement. There is a historically high level of distrust between the two countries.

Our view, like the S&P, oil can rally but my gut feeling is we are in the first inning of a very long, treacherous, global shrink down. I tweeted very early the I thought the ETFs and mutual funds had money to put to work. After selling off down to 2456 just before 1:30 CT the ES ‘back and filled’ for 45 minutes and then started upticking. I was not surprised by the $2 billion to buy MOC nor was I surprised by the  70 handle rally off the afternoon lows. Let’s face it, money was set to go into stock on the close and that’s exactly what happened. I don’t need to read about it in the Wall Street Journal because I was long from 2463 and sold 2523s. Our lean, I can’t rule out another upside push / more MOC buying but I also think the coronavirus headlines will continue to haunt the stock market. If the ES is going to continue higher it will have to close above 2530. On the downside, a close under 2350 could project new lows. You can take it from there. 



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.

Click to access today’s values

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.

Follow MrTopStep in our Social Space:

Danny Riley (3544 Posts)

Danny Riley has worked in the futures and options industry for 38 years, including the CBOT’s bond room, where he worked for several of the Market Wizards. He went on to build the largest volume desk in the S&P 500 Index Futures, serving some of the largest banks and hedge funds, the UBS program trading business, and some of the world's top individual traders. As a leader and co-creator of the MrTopStep IM-Pro Trading Room, he shares trading ideas and breaking market news live from the floor with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.


(Visited 51 times, 1 visits today)

Leave a Reply