by Danny Riley

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S&P Now Being Served Up For Thanksgiving

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Our View

The holiday week has a number of economic releases but Wednesday is loaded up. There are seven economic releases slated for that day including the GDP and the PCE number. For now, the only thing that has changed is the worsening geopolitical climate as the Russian military has recruited “hundreds” of Yemeni fighters, according to a new report, as Moscow pays dearly in casualty counts for gains in eastern Ukraine. I think this situation is only going to get worse before Trump takes office.

Our Lean

As volume drops, the ES and NQ are going to go higher and higher. The markets are on a roll, and barring some extreme headlines, I think the ES is going to take out its contract high and has a clear shot at 6100.00.

I’m sorry, I do not have much else to say, but as the holiday week kicks in, the markets will just go higher and higher.

MiM and Daily Recap

The ES traded down to 5940.75, made a high at 5977.00, and opened Friday’s regular session at 5968.25. After the open, the ES traded down to 5967.00 and rallied 26 points to reach 5993.25 at 9:48 AM. It then dropped 15 points to 5978.25 at 9:52 AM, rallied 13.75 points to 5992.00 at 10:00 AM, and subsequently dropped 29.25 points to 5962.75 around 10:28 in the morning.

The market then rallied 28 points to 5990.75 by 11:04 AM, sold off 22 points to 5968.75 at 11:24 AM, and rallied 22 points back to a double top at 5990.75 by 12:24 PM. Following the double top, the ES sold off 12.5 points to 5978.75 at 12:40 PM, rallied to a new high by 1 tick at 5993.50 by 1:12 PM, and dropped 20 points to 5973.25 at 2:20 PM.

It then rallied 14.75 points to a lower high of 5988.00 at 3:00 PM, sold off another 14.75 points to 5973.25 at 3:20 PM, and spiked down to a lower low moving from 5980.50 down to 5972.75 at 3:29 PM in less than a minute. A late rally brought the ES to 5983.50 at 3:50 PM as the imbalance showed $59 million to buy. The market rallied further to 5992.75 at 3:57 PM and traded 5986.00 at the 4:00 PM cash close.

After 4:00 PM, the ES remained within a narrow range and eventually settled up 24.50 points or +0.41%. The NQ settled at 20,878.75, up 85 points or +0.41%. The YM settled at 44,395.00, up 0.92%, and the RTY closed at 2,418.00, also up 0.92%.

Overall, it was a “buy the pullbacks” trade, with the main emphasis on the RTY rotation. Regarding the ES, it seems the market doesn’t want to go down. Volume was in line, with 1.47 million contracts traded.

How to read the MIM

Technical Edge

Fair Values for Nov 25, 2024:

SP: 17.36
NQ: 66.67
Dow: 94.33

Daily Breadth Data 📊

NYSE Breadth: 78% Upside Volume
Nasdaq Breadth: 67% Upside Volume
Total Breadth: 68% Upside Volume
NYSE Advance/Decline: 76% Advances
Nasdaq Advance/Decline: 70% Advances
Total Advance/Decline: 72% Advances
NYSE New Highs/New Lows: 284 / 26
Nasdaq New Highs/New Lows: 301 / 91
NYSE TRIN: 0.89
Nasdaq TRIN: 1.13

Weekly Breadth Data 📈

NYSE Breadth: 64% Upside Volume
Nasdaq Breadth: 67% Upside Volume
Total Breadth: 66% Upside Volume
NYSE Advance/Decline: 73% Advances
Nasdaq Advance/Decline: 69% Advances
Total Advance/Decline: 70% Advances
NYSE New Highs/New Lows: 394 / 140
Nasdaq New Highs/New Lows: 460 / 518
NYSE TRIN: 0.93
Nasdaq TRIN: 0.95

MTS Levels:

How to read/use the MrTopStep Levels

Room Summaries:

Polaris Trading Group Summary Friday, November 22, 2024

Overview: The session on “FRYDAY” followed a “Cycle Day 2” pattern characterized by rotational consolidation. This meant a mostly balanced market, as anticipated in the Daily Trade Strategy (DTS) briefing, with price respecting key levels outlined pre-market. Bulls maintained control throughout the day, but the range-bound nature kept trades within well-defined zones.

Key Highlights:

Pre-Market Prep:
- The day’s plan included monitoring price action around 5970, with bullish targets at 5985–5995 and bearish ones at 5950–5945.
- David emphasized proper orientation to Cycle Day 2 dynamics (rotational movement and consolidation).
Morning Trades:
- Opening Play: David leaned long early, targeting 5985 per DTS briefing, which was swiftly fulfilled, marking a strong start to the day.
- Price held above VWAP (5972), maintaining bullish momentum within the 5970–5990 “sandbox.”
- Crude Oil (CL): A successful long trade hit both targets, locking in profits before stopping at breakeven.
Market Rhythms and Lessons:
- David repeatedly encouraged traders to stay focused on specific, actionable questions about the market setup and trading environment.
- Discussion revolved around refining strategies in rotational markets, using the OODA Loop Decision Matrix for structured decision-making.
- Traders were urged to apply theoretical concepts to their unique setups and consult the Member’s Area for further education.
Afternoon Session:
- The market remained within the Initial Balance and continued to consolidate. Price held above the open range, reaffirming bullish control, but lacked “escape velocity” to break higher.
- David reiterated patience, as the chop zone lacked clear edges for high-probability setups.
Closing Remarks:
- The afternoon was uneventful, with minor MOC (Market on Close) buy signals (“mice nutz”).
- David humorously noted that algos might “rip it” to close the week, but the session concluded with a predictable consolidation, consistent with Cycle Day 2 dynamics.

Positive Outcomes:

Early alignment with the DTS briefing resulted in target fulfillment and profit capture.
Successful application of structured decision-making frameworks (OODA Loop) in rotational markets.
Valuable educational emphasis on narrowing focus to actionable trade setups in balanced conditions.

Lessons Learned:

Context is critical, but drilling down to actionable specifics is where trading profits are generated.
Adapting to rotational consolidation requires disciplined patience and clear risk management.
Utilizing resources, like the educational materials in the Member’s Area, reinforces consistent strategies.

Conclusion: Friday’s session underscored the importance of preparation, strategy alignment, and adaptability in a range-bound market. Despite limited opportunities later in the day, the early successes and educational insights ensured a productive trading experience.

DTG Room Preview – November 25, 2024

Market Brief for Thanksgiving Week:
- Holiday Schedule: This is a short trading week with U.S. stock markets closed on Thursday for Thanksgiving and an early 1 PM ET close on Black Friday.
- Market Reaction: Overnight stock futures gapped higher following news of Trump’s nomination of Scott Bessent for Treasury Secretary. Bessent’s support for tariffs and tax cuts, coupled with a focus on economic and market stability, was positively received.
- Economic Data: While today’s calendar is light, the week is packed with key reports including Fed Minutes, Core PCE Price Index, GDP, Consumer Confidence, Durable Goods, and more. The market focus will be on how the Fed interprets these data points, particularly inflation trends, with core PCE expected to rise.
- Fed Outlook: Fed Governor Michelle Bowman recently noted stalled progress toward 2% inflation. As a result, the FedWatch probability for a December rate cut has dropped to 50.9%.
- Corporate Earnings: Major earnings this week include Dell, CrowdStrike, Macy’s, and Dick’s Sporting Goods (Tuesday). Earnings today post-close feature Agilent, Woodward, and Zoom.
- Market Dynamics: Volatility declined last Friday, and this week it’s expected to be influenced by reactions to economic data, likely tapering off in the afternoons. Overnight volume was lighter than usual, with bullish bias leading into today’s session.
- Technical Levels for ES Futures:
  - Resistance levels: 6115/23.
  - Support levels: 5943/48, 5846/51.
  - ES remains in the middle of its intermediate uptrend channel, with the 50-day MA at 5858.50 now behind it.
Expect a quieter trading environment amid holiday dynamics, with movements primarily guided by economic releases and market sentiment.

ES Week vs. Week

The bulls have regained the 6000 area. Looking for resistance at 6100 as new contract highs above 6053.75 are put in during a low-volume holiday rally.
Downside resistance short term is proof of a 6000 hold and a backstop at 5978.

NQ Week vs. Week

NQ lagging ES again needing to set a close above 20976. Contract highs sit above 21340.76 which is still about 2.5% higher than Friday’s close. Today’s gap opening helps but needs to climb above the previous Friday’s sell-off open of 20981 and hold and close above today.