Market Review
Gagan Daphu – ES-Zone
ES-Zone’s room at Mr.Topstep provides a number of high probability entries and 3 scenarios per day, Orange path, White path, and Grey path. These help traders act at different levels on a variety of outcomes. Stops and targets are also given on the live screen share along with commentary.
Currently, we are bullish for the model targets to 3070-3080.
SPX Pre-US Open Update
SPX drifted higher during the European session. For the US open we expect that a likely push up will be blocked below 3275 for 3,226.9-31.6 before pushing up towards 3,280 (white path). However, if the bounce gets blocked below or at 3,242.3 then there will be scope for a deeper pullback down to 3,195.3-200.7 before pushing up (grey path). Finally, an immediate push down that holds at or above 3,242.3-6.4 will most likely open 3,280 (orange path).
Recent trade from Thurs Globex session –
The ES sold off to our grey zone, this level was given on the morning research path, we bought live in the room at 3183 in Globex and closed 3243 Globex for 60 handles.
Blue lines are entry levels and Red lines denote stops.
For trials email Marlin@Mrtopstep.com
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Closing Prices
In the Tradechat Rooms
The MiM
At 2:30 pm ET we moved our MiM to an 844M buy, that chang help move that market into a decent upside pace, leaving the rest of the market behind. Baghdad news at the end of the day shaved almost 15 points from the day, even though the MOC imbalance at the reveal was 1.5B. Not enough to swamp out rumors of war.
HFT Alert
We ended up with 56 program trades detected yesterday. That is a busy day indeed. I just picked out the heart of the day to show today with two aggressive buy programs executed just before 11:30 am ET. That pushed a bull market that had stalled into gear with a more aggressive pace to the upside.
Sneak a Peek of the HFT-Alerts: https://h2.fortunesrocks.me:3663/
Economic Calendar
Globex
GLOBEX High 3246.25, Low 3281.00 Volume 3239.00 Day Session 1/8/2020 Opening Print 871,000 High 3267.75 Low 3236.00 ES Settlement 3260.25 Total Volume 2.25 million
S&P Up 86.75 Handles From Iran Missile Strike, PitBull Low
After Iran launched more than a dozen ballistic missiles against two U.S military bases in Iraq the ES sold off all the way down to 3181.00 and rallied up to 3246.25 on Globex and opened yesterday’s regular session at 3230.00. After a three handle drop down to 3236.00 the ES traded up to 324950 at 9:20 CT, pulled back down to 3238.25 and then rallied up to 3252.50, pulled back down to 3244.25 at 10:32 and then shot up to 3262.25 after President Trump’s press conference. After the high and some sideways price action the ES pulled back down to 3255.00 and then traded 3267.75, 86.75 handles off the Globex low.
At 2:30 the ES traded 3267.00 as the MIM showed $562 million to buy, traded 3265.00 as the final 2:45 cash imbalance showed $574 million to buy and jumped up to $1.47 billion and then a headline hit saying rockets were hitting the US green zone in Baghdad and the ES traded down to 3252.00. The ES traded 3254.00 on the 3:00 cash close and settled at 3260.25 on the 3:15 futures close, up 27.25 handles or +0.84% on the day.
In the end, the ES shook off all the uncertainty and closed extremely firm. In terms of the day’s overall trade, total volume was high with 2.25 million futures traded.
Chart of the Day
Our View
U.S. And Iran Slow the Dance
While the U.S. and Iran have backed away from conflict, Iran proxies are not backing down. Late yesterday two rockets reportedly hit the Baghdad ‘Green Zone’ a day after Iran missile attacks on US targets in Iraq. Both Iran and Hezbollah have said they are going to push the U.S. out of the Middle East. Did the U.S. and Iran back down from a full-blown conflict? Yes. Has the death of Qassem Suleimani, the commander of Iran’s Islamic Revolutionary Guard Corps’ Quds Force been forgotten? No! Maybe in the short term things will quiet down but as the U.S. continues placing sanctions on Iran this is far from over.
Yesterday’s view was right on, sell the early rallies and buy weakness. That said, neither I nor the PitBull ever thought the ES could or would rally 87 handles off of Tuesday night’s 3181 low. What I can say and have said many times is that if you have the wherewithal to buy into the negative headlines you get paid handsomely. Somehow the algorithmic and high frequency (HFT) trading programs know how to exploit the weakness and, just when the markets look their worst, they move the other way. Clearly, yesterday was an extreme example of that!
Our view, if there is anything that is clear to say it’s that new money continues to flow into stocks in the new year. How long will it last? I think the answer to that question lies in one place and it’s called quantitative easing. Supposedly the federal reserve is going to review its QE4 program at the end of January but based on recent events it’s my view that the program will continue into the first quarter. The ES is very extended and as we saw yesterday after the ES made its 3267 highs it just takes one bad headline to knock the futures down. Our lean is to be careful and sell the early rallies and buy weakness with tight stops. 3283, 3300, and 3312 are on tap!
PitBull Oscillator: CLG OSC 2/16 turns up on a close above 6384, ESH OSC 4/24 turns down on a close below 324422, VIX OSC 3/-3 turns up on a close above 1465
Video of the Day
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Market Vitals Technical Analysis
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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