This Rally Can Go Higher in Time

Today is the monthly options expiration

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Our View

After a 400-point rally, it seems to me that the recent pullback of the ES and NQ is all part of a larger back-and-fill pattern. That doesn’t mean they won’t sell off again, but it’s FRYday and the big question is, Will the markets hold?

The bonds are up, with 10-year Treasury yields around 4.4% and hitting their lowest level in months. European stocks rose, while Asian indices were mixed, and we have October housing-starts data due at 8:30 a.m. ET. Not surprisingly, there’s also some Fed speak on the calendar. 

It’s monthly opex today, so remember to keep that in mind in regards to position sizing, as well as some of the rips and dips we can see. 

Our Lean

I’m sorry I have to keep things short this week…Covid-19 is not a fun ride!

4500 held yesterday, but it’s the November options expiration and we have two days of sideways to lower price action…Buy the pullbacks and look for the RIP back to 4550+.

Longer term, the ES looks to be going above 4550, maybe 4570, and over the next 2 to 3 weeks, it could go a lot higher, potentially up to 4700.

To all premium Opening Print readers, email me at Danny@mrtopstep.com before 12:00 pm ET with a guess on where the ES will close on the 5:00 futures close and I’ll give $500.00 cash to anyone who’s right. Have a good weekend and be safe.

For those of you who like HandelStats levels, here they are: 

MiM and Daily Recap 

The ES traded down to 4507.00 on Globex and opened Thursday’s regular session at 4513.00. After the open, the ES traded down to 4512.00, rallied up to 4526.25 at 10:01, and slowly sold off. After a dip down to 4510, I put this in the MTS chat  

We ended up getting a flush down to 4501.75 around 11:30 and after the low, the ES rallied up to 4519.75 at 12:44, pulled back to a higher low at 4506.50 at 1:51 and then retested the high at 4419.00 at 2:50. From there, it back-and-filled just above the VWAP as the early imbalance showed $55 million to buy and traded up to 4521.25 as the 3:50 cash imbalance showed $121 million to buy. The ES traded 4523 at 4:00, then drifted higher into the 5:00 futures close, trading 4528.50, up 4 points or 0.09%. 

In the end, it was a pullback to the 4500 area and rally. In terms of the ES’s overall tone, the rally clearly shook off the selling. In terms of the ES’s overall trade, volume was lower but steady: 263k traded on Globex and 1.194 million traded on the day session for a total of 1.458 million contracts traded.

Technical Edge 

ES 

Levels from HandelStats.com

NQ 

Economic Calendar

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!