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TRUMP v. HARRIS 2nd pitch this week.
Next Pitch is FOMC.
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Our View
As we head into Super Tuesday, one has to wonder just how “super” it will be. One day, Trump leads by 6 points; the next, the candidates are neck and neck. But that’s not the only game in town—Wednesday starts the Fed’s two-day meeting with the next rate reduction on the table. My cousin Bobby Riley, a smart trader, said he’s been out of day trading for a while, but he’ll be online Tuesday night. If there’s an oversized drop, he’ll look to scale into some long ES. I can’t disagree, especially when the benchmark 10-year note yield fell to 4.309% from 4.361% on Friday—its highest closing yield since July 2. With the buy NQ/sell ES rotation, late in the day it might not have looked like it, but someone was definitely buying the NQ.
Our Lean
How’s this for a scenario? The ES will rally to 5900.00 if Trump is elected and sell off down to 5500.00 if Harris wins. What if there’s an issue with the voting and the decision takes a week or two? The stock market could get hammered before a recovery rally. Today’s trade should be another low-volume chop.
Historically, election day is bullish, but markets are going to be swamped by headlines. I took a low profile yesterday, and while I may trade a bit today, I’m inclined to wait for Tuesday night to make any major decisions. What I do know: sellers show up every day after 12:00 to 1:00. Let’s see how this unfolds.
MiM and Daily Recap
The ES made a low on Globex at 5740.00 right at the opening of the session and rallied up to 5776.50 overnight, opening Monday’s election-filled session at 5757.75. After the open, the ES traded up to 5761.50 and then sold off 23 points down to 5738.75 at 9:36.
The ES traded 5757.55 as the 3:50 cash imbalance showed $1.4 billion for sale and sold off down to 5738.50 and traded 5744.00 on the 4:00 cash close. After 4:00, the ES rallied a bit up to 5749.25 and settled at 5744.25 on the 5:00 futures close, down 13.5 points or -0.23%. The NQ settled at 20,086, down 67.5 points or .34% on the day.
In the end, it was basically the same trade we’ve been seeing for over the last two weeks: early rally and failure. In terms of the ES’s overall tone, there was some type of buy NQ / sell ES rotation. Volume was low, with 210k ES contracts traded on Globex and 1M during the day session, totaling 1.3 million contracts.
MrTopStep Levels:
Technical Edge
Fair Values for November 5, 2024 📈
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S&P 500 (SP): 29.02
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Nasdaq (NQ): 114.81
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Dow Jones (Dow): 150.06
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Daily Market Recap 📊
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NYSE Breadth: 54% Upside Volume
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Nasdaq Breadth: 56% Upside Volume
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Total Breadth: 55% Upside Volume
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NYSE Advance/Decline: 59% Advance
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Nasdaq Advance/Decline: 50% Advance
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Total Advance/Decline: 52% Advance
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NYSE New Highs/New Lows: 72 / 40
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Nasdaq New Highs/New Lows: 77 / 137
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NYSE TRIN: 1.24
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Nasdaq TRIN: 0.80
Weekly Market 📈
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NYSE Breadth: 43% Upside Volume
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Nasdaq Breadth: 52% Upside Volume
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Total Breadth: 49% Upside Volume
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NYSE Advance/Decline: 36% Advance
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Nasdaq Advance/Decline: 40% Advance
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Total Advance/Decline: 38% Advance
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NYSE New Highs/New Lows: 270 / 134
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Nasdaq New Highs/New Lows: 370 / 353
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NYSE TRIN: 1.27
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Nasdaq TRIN: 0.91
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VIX: ~21.91
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Room Summaries
Polaris Trading Group Summary – Monday, November 4, 2024
The day began with PTGDavid reviewing key support and resistance zones, emphasizing an initial bullish move above the “Line in the Sand” at 5755, fulfilling the early target of 5770-5775. Traders were reminded of the critical importance of maintaining discipline around these levels.
Key Trades and Observations:
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Crude Oil (CL): David executed an early short from the open range, hitting all targets successfully. This trade underscored the benefit of monitoring open-range strategies.
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NASDAQ (NQ): A short trade was triggered at open, but a long bias was noted following a retest of Friday’s low. Although some participants held differing views, David clarified the effectiveness of varying EMA settings and ATR preferences, indicating the importance of adapting indicators to individual trading styles.
The group discussed the “Positive 3-Day Cycle” for tracking price movements, with David confirming this cycle’s success rate at 93%. This conversation provided a useful reminder of the cycle’s reliability as an indicator, particularly for identifying trends in expected market moves.
Market Dynamics:
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Midday Chop Zone: David warned against overtrading during a period of high volatility without clear direction, emphasizing caution and patience.
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“Whiplash” Structure: Later in the session, a stop hunt below the prior low allowed for a quick recovery long trade to 5755, demonstrating the advantage of being prepared for rapid reversals.
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Afternoon Volatility: In the quieter afternoon, traders observed a “Shake n Bake” movement around 2 p.m., followed by a drop in volatility, especially in the NQ. David noted a substantial MOC (Market on Close) sell imbalance of $1.6 billion near the close, but price held the 5740 support, a key level to monitor for the following day.
Lessons and Takeaways:
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Adapting indicator settings (e.g., EMA and ATR) based on personal strategy can improve trade precision.
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Awareness of cyclical patterns, like the 3-Day Cycle, and setups like stop hunts and whiplash structures, adds valuable context to trade entries and exits.
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Exercising patience during periods of choppy movement is essential to avoid overtrading in unpredictable zones.
David ended the day by posting Tuesday’s trade strategy, ensuring traders are prepared to use 5740 as a key reference point for the next session.
Discovery Trading Group Room Preview – November 5, 2024
Last week saw modest declines in major indices, with the S&P 500 down 1.37% and the Nasdaq 100 down 1.5%. This week, traders are focused on Tuesday’s U.S. election, where either a Trump or Harris win could impact market sentiment differently. A Trump victory could trigger volatility due to potential tariff changes, while a Harris win may continue the current market trajectory.
The Federal Reserve is also in focus with an anticipated 25-basis point rate cut on Wednesday, expected to impact market direction. Additionally, key earnings reports from companies like Palantir, Qualcomm, and Moderna will provide insights into corporate health as the S&P 500 shows a 5.1% year-over-year earnings growth, marking a continued positive trend.
Key technical levels for the S&P 500 include a swing bottom, with bears eyeing support at 5741/44s and bulls looking to clear the 50-day moving average around 5758.75 to maintain upward momentum. Factory Orders at 10:00 a.m. ET will be the primary economic report today.
NQ – Nasdaq 100 Futures
No progress wither way from last weeks drop
NQ – Nasdaq 100 Futures
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!
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