Market Review
Our thoughts and prayers go out to anyone who may be affected/infected by the devastating virus that is spreading. Last check, 134,804 infected with at least 4,984 deaths. That’s up 1,597 from last Friday.
PREVIOUS DAY — THURSDAY, March 12, 2020
On March 12 price opened at 2559 even, 181 6/8 handles limit down from settlement. The worst day in the equity markets since 1987 with a 10 percent drop. Now, we could have 15% more…
The market opened limit down locked. The last price was 2589.50 handle. Some traders are expecting a strong flush down. If you love news, that is what greeted you:
Futures Trading Was Halted On Limit Down; Stocks May Be Halted Upon Open At Down 7% Threshold. UPDATE: S&P 500 First (7%) Circuit Will Be Triggered 2,741.38. Seeing Stocks Halted Due To Down 7% Circuit Breaker. S&P 500 Futures Down 7.07% To 2,546.50. S&P 500 Futures Down 9%.
From the second limit down, the opening price moved down to the first low of the day then spiked up to the high of the day. It pulled back to just below the opening of that second limit down and then slowly worked itself up to wet beak the high of the day. It started to lose it’s bid and then drifted down to where? The opening of the second limit down!
After a test of the final limit down, more rip up to 2658 tagging +1,000 ticks and then a drift back down to just under 2448 handle. What does all this mean, Wyckoff? Probably not a good time to catch the falling knife?
In fact, I did not give any levels yesterday. I’m sure you know all the reasons why: the entertainment industry is hurting, cruise lines, and now sports. Look for the movie industry to potentially shut some theaters and Netflix streaming to start to pick up steam.
This is just a snippet from what the Pros and Numbahs subscribers received yesterday. Notice by using the clock you get a lean on where the low might potentially find itself in the trading day. That’s the power of the clock.
For more detail please review the Market Recap Video. In this video, I discuss the Old School Market principle Wyckoff called “Bag Holding ” and give you a little known/forgotten way to measure the potential cause built up in a trend.
LOOKING FORWARD — FRIDAY, March 16, 2020
My notion is that since Feb-19 and Feb-20 the market has foreshadowed that the path of least resistance is to selling pressure. The daily range has been in the 100 point range compared to 18, 20, and 22 handles.
Some traders are looking for price to get a bid due to it being Friday and the aggressive price movement with yesterday’s two limit down moves. And the close on 4,258,128 volume could signal a selling climax?
That’s 3397.50 down to 2393.50 handle. That’s a 1,004 in the E-Mini. Now factor in that there won’t be any humans in the Chigaco pit starting next Monday and the contract moves over starting today.
Could we see a move up to 2,589 ¼ handle or greater today or next week? The bigger picture supply line has seen two different angles of descent. Could there be a third? This day sets up the first day in a new cycle. And it is a Friday.
Perhaps the best play is to watch the wheels go round and round and really love to watch them roll until more certainty starts to enter into the market. If not, Globex has popped up to test the supply line at 2546 from a low of near 2400 handle. The best argument by my eye would have to be 2658 where the price was turned away with +1,000 ticks. Best to see this in real-time CASH and not GLOBEX.
As you can see this is issue number 627. I’ve written 627 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: no levels given due to curbs Monday, 26 points Tuesday, 22 points Wednesday, and no levels given due to curbs Thursday. Total for the week 48 points, that would be $2,400 on 1 lot and $7,200 on 3 lots.
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
MiM was very negative today. So was the market. It didn’t help that $MCK (McKesson) settled a multi-billion spin-off which added $4B to sell driving a sell bias on the MIM negative. Subtracting out that component and the MIM was really about 1B to sell and verified by the fact that at 3:55 PM, as MCK was paired, the MIM show slightly over 1B to sell. That, however, was enough to sink the Bismark and down we went 50 points in the last 5 minutes. Another small move. One predictable feature in the close was that our 3:30 pm buyers showed up on time again, keep that in mind for future setups.
Get the skinny when we get it. Join the MiM.
HFT Alert
We did only 64 programs today, the bots are settling down for the longer play now. Of those programs, 31 were buys and 33 sells., no real bias here as we try to see if we can form some sort of bottom.
Chart of the Day
Top Stories on MTS Overnight:
- ‘Stupid beyond even my wildest…
- Warren Buffett compared fear and greed to…
- Protected: Premium OP: WHO Declares Pandemic/CME…
- NYT: Corona Virus Update
- Fed On Repos
- ‘Can we panic now?’: Stocks, oil,…
- CME Group to close Chicago trading floor Friday
- Analysis: Facing virus outbreak, Trump’s tactics fall short
- WSJ: Market Update
- Dow Enters Bear Market as Stocks Give Back Gains
- Americans snap to attention on virus as big events canceled
Globex
| (ESH20:CME) GLOBEX Session | (ESH20:CME) Day Session |
| High 2762.00 | Opening Print: 2563.00 |
| Low: 2595.50 | High: 2588.25 |
| Volume: 837,000 | Low: 2433.75 3:15 Close Aftermarket Low: 2429.75 |
| ES Settlement: 2469.00 | |
| Total Volume: 24.3 M |
S&P 500 Futures: S&P 500 Down 10.4%; Stocks Second Largest % Move In My Life Time
The ES traded a high of 2762.00 down to LIMIT down at 2595.50 on Globex during Wednesday night’s Globex session and traded 2561.00 on Thursday morning’s 8:30 CT futures open. I am sorry but I was unable to do a ‘blow by blow’ of yesterday’s stock market crash. What I can say is it was a perfect storm to the downside with the S&P falling 308 handles or -11.25% in 25 hours. It was another day of major negative headlines from Kansas City, Missouri’s, Mayor Quinton Lucas issuing a state of emergency to New York City Mayor Bill de Blasio Declares State Of Emergency to the Fed saying it was going to inject more than $1.5 trillion of ‘temporary liquidity” into Wall Street Thursday and Friday to prevent “ominous trading conditions” from creating a sharper economic contraction.
From the #Wednesday’s high at 2814.50 to yesterday’s aftermarket low at 2429.75, the S&P futures (ESH19:CME) fell an astonishing 348.75 handles and from yesterday’s high at 2588.25 to the aftermarket low the futures fell 158.5 handles. The ES traded up to the 2520 level late and tanked as the MrTopStep MIM went from $2 billion to sell to nearly $6 billion to sell. I really am just lost for words.
In terms of overall tone, it was the worst price action I have ever seen. In terms of the day’s overall trade, total volume was 4.3 million with 837,000 coming from Globex making total day volume 3.46 million contracts traded on the day session.
Our View
New York City Mayor Bill de Blasio Declares State Of Emergency
I think we all knew things were going to get worse but the rapid spread of the virus across Europe and the United States has not only shaken the global stock market but the world as a whole. While I have made several correct predictions I can not say that I feel good about any of them. It’s all fun and games trading the S&P futures but when thousands of people’s lives are at risk it becomes an entirely different story. According to Brian Sack, who ran the New York Fed’s markets desk from 2009 to 2012 and is now the director of economics at hedge-fund manager D.E. Shaw group the “Financial markets are not functioning well, and the liquidity situation is evolving into something that necessitates a broader and stronger response by the Federal Reserve,” While I have said many times I am not an economist or a Wall Street researcher I can say the speed of the sell-off is frightening and while I have been part of every major stock market move since 1985 I have never, and I mean never, seen anything like this. The fed took initial steps earlier this week to boost the volume of lending for overnight repurchase agreement operations, or repos, and announced plans Wednesday to increase lending to more than $500 billion, from less than $200 billion, before announcing the additional expansion yesterday and the futures rallied over 90 handles and reversed quickly after the headline.
After Mayor de Blasio declared a state of emergency things just seemed to go from bad to worse. My guess is several more states will be doing the same thing very soon. Our lean, some stats show that after “the worst down days ever” that the S&P rallied 19% in two days. I asked the PitBull and he said it’s quite possible and I agree but I highly doubt the S&P can rally that far. The government/fed seems to be reacting but if the virus persists for two or three months it’s very likely ES 2200.00 could be the next downside target. Maybe it’s time to buy some cheap calls, I’m sure there are a lot of those around.
Market Vitals Technical Analysis
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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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