***Written 8 pm Tuesday evening for Wednesday’s trading
Tuesday’s Session was Cycle Day 2 (CD3): Session unfolded as a “normal” CD2 with price testing key support and resistance zones early in the day, establishing a balanced range zone albeit with higher developing Value Zone. Market on Close Buy Imbalance to the tune of $3.5 Billion surprised most traders driving price higher into settlement.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Having closed at session highs and having fulfilled 3 Day Cycle Objectives, we then have Two Scenarios to consider.
1.) Price continues higher targeting 3089 – 3095 CD3 Upper Penetration Range Zone with 3100 – 3105 upper ATR (3) Zone.
2.) Price fails to sustain bid above CD2 High (3079) converting and reverting back into prior range targeting 3071 – 3064 Central Pivot 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 3
Thanks for reading,
Polaris Trading Group
In the Tradechat Room
NIce MiM yesterday that consistently grew into the 15:50 PM ET reveal of 3.4B. The buying started around 15:25 and with the updraft from the MOC reveal propelled up to about a 20 point move from the low to the high. Nice directional trade.
Reminder: June is Russell 2000 reconstitution month. Here is the schedule for that:
- Friday, May 8 – “rank day” – Russell US Index membership eligibility for 2020 reconstitution determined from constituent market capitalization at market close.
- Friday, May 22 – “query period” begins – preliminary shares & free-float information for Russell 3000 Index constituents are published daily & queries welcomes (query period runs through June 12)
- June 5 – preliminary US index add & delete lists posted to the FTSE Russell website after 6 PM US eastern time.
- June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
- June 15 – “lockdown” period begins – US index adds & delete lists are considered final
- June 26 – Russell Reconstitution is final after the close of the US equity markets.
- June 29 – equity markets open with the newly reconstituted Russell US Indexes.
Questions? Please email me: Marlin@mrtopstep.com
Get the skinny when we get it: Join the MiM.
Chart of the Day
S&P top of book depth Goldman Sachs. Still liquidity issues in the futures market.
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|(ESH20:CME) GLOBEX Session||(ESH20:CME) Day Session|
|High 3075.50||Opening Print: 3062.25|
|Low: 3035.00||High 3078.25|
|Volume: 340,000||Low: 3004.75|
|ES Settlement: 3077.00|
|Total Volume: 1.4M|
Green Acres Is The Place To Be…
In the 60s it was cool to live in a small town. I grew up in Crystal Lake Illinois, total population 7,000 maybe 9,000 because they never updated the sign. The downtown drug store was across the street from the local grocery store and the 31 Flavors ice cream shop was on the corner next door to the hardware store. I loved it, I grew up with 10 kids in my family, 6 girls and 4 boys. I had a minibike I would ride down the paths in the woods for days at a time. In the winters we would hide in the bushes and pelt cars with snowballs. I never wanted to leave but then my parents sold the house and my mom took me to the new house in Oak Park Ill. to show me my room. I got mad and I hitchhiked 45 miles to get home. I went from a high school of 600 to a high school of 6,000. At first, I didn’t like it but as time went by I was so happy to be in the city where everything was going on, I really never even thought about leaving the city. All the people, culture, restaurants, art museums, the lake, the street fairs, the clubs… it’s no wonder that the ‘millennials’ flock to the big cities. You’re young, you’re upwardly mobile… it’s all about NY, Chicago, LA. No one wants to be in a small town when you can hit Manhattan and go have a killer dinner and Delmonico’s! What the hell, you’re fresh out of college making $150,000 a year and ‘everyone’ is moving to the ‘city’
And then you have your die-hard New Yorker or Chicagoan that has lived in the city for 70 years and is NEVER MOVING!!! Like many things in life we just take for granted that everything will be ok. Most people worry about how they are going to pay their bills or how their retirement account is doing, not a virus that is going to lock down billions of people and shut down businesses and economies around the world.
Call me simple or stupid but the ES has been trading in a big ‘back and filling pattern’ and volume is dropping as volume has been declining. It’s 8:30 pm CT and the ES traded all the way up to 3092.25. I have remained steadfast on my ES 3100 call but I think the futures are going to continue moving up.
I know it’s a difficult time. Many things just do not make sense and I suspect things will continue in a bad way. I do not think the riots are over. The timing of George Floyd’s death and the reopening of the US economy during the COVID19 outbreak is only going to add to the fear factor. There has already been a surge in new cases in Florida and you don’t need a PHD to know the riots with thousands of people are going to cause a big surge. Three weeks ago I said to look for a high in July. If that is the case the ES could very well be on its way to 3180. Only time will tell.
Our view, this has to be the most hated rally in history. Every negative you can think of and the ES keeps going up. Our lean is to continue to follow the patterns; sell the gap up open, look for the midmorning low and come back at 2:00 and wait for the 2:30 sell program and get long for the MiM RIP! What do you think?
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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