Rejection At Higher Prices

The S&P 500 futures (ESZ19:CME) closed on Tuesday at 3092.00, a couple points above its opening print of 3089.28 after closing Friday at 3089.25. Its trading range (3081.25 – 3102.00) expanded slightly, with the close coming right in the middle of the range. Still looks like a topping pattern to me; no real conviction on the early rally with sellers stepping in. Market tops are uneventful; time will tell, but my bets are on some downside.

Around 2:15 p.m. CT, the ES traded down to the 3085 area as the MiM showed $500 million to sell, but popped back up to 3090 as the MiM dropped down to $250 million to sell. The futures went on to trade 3088.50 when the 2:45 cash imbalance reveal showed $175 million to buy MOC, then 3091.00 on the 3:00 cash close, and settled at 3092.25 on the 3:15 futures close, up +4.75 handle, or +0.15% on the day.

In terms of the days overall tone, the ES had a decent range, but it was slow. The futures were firm until it made its high at 3102, then sold off after Trump spoke. So, firm in the early goings, and a tad weak after, but still closing firm. In terms of the days trade, volume was light, with only 1 million contracts traded.

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ES Market Profile chart courtesy of AMS Trading Group

The Dollar

The party’s over; it’s time to call it a day. If you still think the market is going higher, put this into your decision tree matrix… Trump spoke yesterday, and the markets didn’t move. As a matter of fact, they gave up the ghost of their early morning upside. Earnings reports are pretty much done. The Fed isn’t going to step in anytime soon, but keep an eye on some of the “smaller” countries interest rate moves; New Zealand kicks off the latest round overnight, and will probably lower rates another ¼ point. Is any of this going to move the market? That’s highly unlikely. It’s time to start trading other commodities.

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Dollar Index Market Profile chart courtesy of AMS Trading Group

The Euro

We added to our long 6E at 1.10300 (6E 12-19) position today. So we’re now long three contracts at an average price of 1.10350, and I’ll keep adding to it if it continues to decline. Notice we doubled the number of contracts bought and will continue to “double” up if 6E continues to go down. It is far closer to a bottom than a top, as the Dollar is far closer to a top than a bottom. Fifty years of trading currencies does provide a great deal of knowledge. Happy to share more of this with you over the coming weeks, as life finally gets back to normal.

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6E Delta Print chart courtesy of AMS Trading Group

Natural Gas Update

Keeping you up to date on Natural Gas, it’s a great chart to watch and learn from, and that is what we are all about. The 2.62 level came into play today offering support. Will it hold? Who knows, we have no position, but if it breaks down, we will get long. It’s winter, surprises will be on the buy side, just don’t try to trade this one every day; buy downside spikes; sell upside spikes. It is the “widow maker”, but then again, we have a feeling that the ES is going to be a “widow marker” for those long the contract as well.Image

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Natural Gas Market Profile chart courtesy of AMS Trading Group

I almost have my office set up, and we should be back to normal early next week. Always wondered what “normal” meant, so let’s just say AT&T’s 5G will be connected before the end of the week. We hope to be live on TradeChat by November 25, so keep watching. We’ll be running “free” until I’ve figured out how to use everything correctly.  

By the middle of December, we’ll have it all figured out, I hope. Keep emailing me at david@amstradinggroup.com and let me know what you want me to highlight and teach. In the interim, thanks for reading what we post. Enjoy your trading.


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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. Any decision 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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