by Danny Riley

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Trump’s Showmanship Sparks Market Momentum

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Our View

Most people don’t operate this way, but I believe in being open. I ended up back in Cleveland Clinic. Friday night, I was running a fever and they sent me home, but I ended up going back there on Saturday. I stayed there until last night and got home around 6:00 PM. The medication they originally gave me wasn’t working, but now I’m on the right path. The problem was that it was a three-day weekend, and I had to sit there most of the weekend waiting for doctors. I really shouldn’t have had to do that but that’s how life goes. Nobody promised me a rose garden, and I’m finding that out. I will win this battle.

The ES has now rallied over 210 points (3.56%) from Tuesday, January 14th, when it caught everyone short ahead of President Trump’s inauguration. I said I thought that there were a lot of buy stops and talked about the 6050 level. Over the last two sessions, the ES has rallied 114 points. Why? Because it was Trump’s turn to put on a show and he did. He brought out heavyweight billionaires, rock stars, governors, mayors, CEOs, and foreign dignitaries to rev up his new administration. Like him or not, he put on quite a show, and the public ate it up and so did the stock market. Am I surprised? Not at all! He’s a showman and he put on quite a show but it didn’t come without some backlash. Over a dozen states have already sued the president over his new policy initiatives.

Trump’s push helped all three major U.S. indexes close higher on the day. The Dow Jones rose 1.2%, and the S&P 500 gained 0.6%. Shares of General Motors jumped 5.7%, while brokerage firm Charles Schwab soared nearly 6% after reporting a 76% increase in quarterly profits. There was a lot of talk about tariffs but so far nothing has been initiated. Apple fell 3.2% after the Jefferies downgrade and the dollar was volatile, rising early in the day but giving back most of its gains later. Bitcoin traded at 109,000 after the launch of the first U.S. spot Bitcoin exchange-traded funds offered by big Wall Street asset managers like BlackRock and Fidelity Investments. Meanwhile, President Trump’s own token, $TRUMP has soared to a valuation of $8.4 billion since Friday night’s launch, while Melania’s token, $MELANIA, is valued at around $800 million, according to CoinMarketCap. I haven’t been able to watch CNBC or Bloomberg, but the level of news and headlines from Friday through yesterday’s close has been astonishing.

Our Lean

When there’s a buying party like this, you’re supposed to go with it, especially when the yield on the 10-year note hits a two-week low. Even T-notes jumped after crude oil sold off to a one-week low after Trump said that he plans to declare a national energy emergency and vowed to increase U.S. crude production.

I don’t see an end to the jump in volatility, buy any 40-60-point pullbacks. I’m not saying you can’t sell a 20-30 point gap-up open but this doesn’t feel like it’s over.

MiM and Daily Recap

*Volume Total is missing Monday’s Shortened Session.

The ES experienced significant Globex swings on Monday with U.S. markets closed and heightened volatility driven by Trump’s inauguration into his second term. The range extended from 5994.50 to 6078.25, with the lows resembling V-bottom setups.

The ES opened the regular session at 6063.75 and despite trading mostly below the open for the first couple of hours, its single stop-run lower to 6043.50 at 10:10 AM turned out to be another buying opportunity, marking the session low. Once the ES reversed on this and traded back up above the open, the uptrend became steady and consistent. By 12:26 PM, it had broken the regular session high and climbed to 6086.50 by 1:14 PM.

From here, a little sideways back-and-fill for 90 minutes or so couldn’t quite test the breakout point of 6072, as it printed 6074.25 around 2:50 PM setting up its final rip into the close. Trading 6083 going into the 3:50 PM MiM imbalance release, the ES moved higher in response to a muted $190 million to buy and squeezed higher on the 3:55 PM update as the imbalance grew to $1.55 billion to buy, propelling the ES to its regular session high of 6087.25. It then dipped slightly to settle at 6084.25 at the cash close.

In the post-market session, the ES briefly jumped to 6093.25 before sagging again to test its previous high and then moving sideways and up into its exchange closing price of 6091.75, up 59.25 points (+0.98%). The NQ also had a strong day, closing at 21,772.50, up 183.50 points (+0.85%).

In the end, it was a buy fest. In terms of the ES’s overall tone, it acted fine. In terms of the ES’s overall trade, volume was a little heavier than average, with the ES trading 1.64 million contracts, while the NQ saw 655,000 contracts traded.

How to read the MIM

Technical Edge

MrTopStep Levels:

How to read MTS Levels

Fair Values for January 22, 2025:

SP: 35.98
NQ: 144.36
Dow: 212.61

Daily Market Recap 📊

NYSE Breadth: 76% Upside Volume
Nasdaq Breadth: 63% Upside Volume
Total Breadth: 64% Upside Volume
NYSE Advance/Decline: 79% Advance
Nasdaq Advance/Decline: 67% Advance
Total Advance/Decline: 72% Advance
NYSE New Highs/New Lows: 152 / 17
Nasdaq New Highs/New Lows: 177 / 95
NYSE TRIN: 1.38
Nasdaq TRIN: 1.29

Weekly Market 📈

NYSE Breadth: 65% Upside Volume
Nasdaq Breadth: 60% Upside Volume
Total Breadth: 61% Upside Volume
NYSE Advance/Decline: 83% Advance
Nasdaq Advance/Decline: 66% Advance
Total Advance/Decline: 76% Advance
NYSE New Highs/New Lows: 138 / 285
Nasdaq New Highs/New Lows: 218 / 483
NYSE TRIN: 1.15
Nasdaq TRIN: 1.07

Good Reads:

JPM – Morning Outlook
MS – January FOMC Outlook & Forecast

Guest Posts

PTG David: Polaris Trading Group

Prior Session was Cycle Day 3: Positive 3-Day Cycle fulfilled by achieving target objective (6086), and extending 124.83% (125.25pts) of the average cycle range of 100.33 handles. It’s the beginning of the new “Golden Age!” Range for this session was 98.75 handles on 1.372M contracts exchanged.

FREE TRIAL link to PTG/Taylor Three Day Cycle

For a more detailed recap of the trading session, click on this link: Trading Room RECAP 1.21.25

…Transition from Cycle Day 3 to Cycle Day 1

Transition into Cycle Day 1: This day begins a new cycle with the objective to find a secure low from which to stage the next rally. Average Decline Projection: 6060 – 6057 zone

ODDS OF DECLINE > 10 = 79%…> 20 = 56%

Levels to consider on pullbacks for renewed buy responses: 6081, 6075, 6068, 6059, 6057

Levels on the upside to monitor for sell responses: 6105, 6107, 6115, 6120, 6125

Nothing changes for PTG…Simply follow your plan.

PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.

As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 6080+-, initially targets 6105 – 6110 zone.

Bear Scenario: Price sustains an offer below 6080+-, initially targets 6065 – 6060 zone.

PVA High Edge = 6093 PVA Low Edge = 6059 Prior POC = 6081

ES (Profile)

Thanks for reading, PTGDavid

Trading Room Summaries

Polaris Trading Group Summary – Tuesday, January 21, 2025

Morning Session:

Opening and Preparation:
- PTGDavid shared resources and links, including the Daily Trade Strategy and tutorials to help members navigate the trading room.
- Morning greetings and light-hearted exchanges set a positive tone for the session.
Initial Trades:
- @CL OPR Long TGT 1 was filled early, signaling a good start to the Crude Oil trade setup.
- @NQ OPR Short was triggered, with TGT 1 and TGT 2 successfully reached by 9:42 AM. David remarked, “Nice trade,” as the stop trail elected, locking in gains.
Key Observations:
- The LIS (Level in Sight) was identified at 6050, and a “sandbox” range of 50–70 provided traders with clear parameters for the day.
- A10 trade executed with full payout achieved, showcasing alignment with the morning’s strategy.

Midday:

Patience Amid Consolidation:
- David emphasized the importance of being patient while price consolidated in the middle of the range. Key lessons were shared about sticking to the process, with a notable quote about evaluating trade quality based on execution rather than outcomes.
Continued Success:
- All @CL OPR Long targets were fulfilled, with a screenshot provided to highlight the trade’s success.
- The “Noon Balloon” trade maintained a long bias, with traders leveraging market movement for gains.

Afternoon Session:

Trend Confirmation:
- The session transitioned from morning consolidation to an afternoon upward trend. Key targets, including 6075 and 6080, were achieved.
- @ES TargetMaster T1 level of 6080 was reached, and David’s technical precision continued to guide the room effectively.
Final Push:
- A10 long trade was executed heading into the final 30 minutes of trading, supported by strong bids at the Value Area High (6075).
- The day ended with prices closing on highs, confirming the bullish sentiment.

Key Highlights and Lessons:

Profitable Trades:
- Multiple targets were fulfilled across instruments (CL and NQ), reflecting the effectiveness of PTG’s strategy.
- Key levels and sandbox ranges provided clear actionable insights.
Focus on Process:
- Emphasis on executing trades consistently, even in the face of potential losses, was a valuable takeaway for traders.
Technical Precision:
- David coined the term “Ultra Precise Technicals” to underscore the room’s ability to identify and act on key market levels with accuracy.

Conclusion:

The day was marked by strategic patience, precise execution, and strong adherence to the PTG methodology. The room successfully navigated market dynamics, achieving significant gains while reinforcing important trading principles.

Discovery Trading Group Room Preview – January 22, 2025

Morning Market Brief:
- Indices Rally: Stocks approached record highs as Trump avoided tariff comments during market hours. The S&P 500 rose 0.9%, Nasdaq gained 0.6%, and the Dow surged 1.2%, fueled by strong earnings from 3M.
- Tariff Speculation: Tuesday evening, Trump floated the idea of a 10% tariff on China, citing fentanyl concerns. This pushed the USD higher as markets responded to the administration’s policy unpredictability.
- Global Trade Updates: Chinese Vice Premier Ding Xuexiang signaled China’s commitment to expanding imports for balanced trade while strengthening ties with Russia amidst external uncertainties.
- Tech and AI Developments: Trump unveiled a $500 billion private AI investment initiative, “Stargate,” with Oracle, OpenAI, and SoftBank as key players. Initial projects in Texas spurred Oracle (+7%) and Nvidia (+2.5%).
- Netflix Q4 Surge: Netflix added 18.9 million subscribers, beat revenue/earnings expectations, and announced a $15 billion stock buyback and price hikes. Shares rallied after the report.
- Corporate Earnings: Premarket earnings include major players like ABT, JNJ, PG, and TRV. After-hours reports feature DFS, KMI, and NOW.
- Economic and Market Trends:
  - CB Leading Index scheduled at 10:00 AM ET.
  - Elevated volatility with ES’s 5-day average daily range at 87 points.
  - ES returned to its intermediate-term uptrend channel, with key resistance at 6370/75s and support at 5987/84s, 5847/52s, and 5762/57s.

ES -Week to Week

I thought we might hit that 6082 level sometime later this week but as everything has been sped up the feat was completed yesterday. That puts me on a bull footing. The bear resumption line is down at 5860. The first levels of support are 6084, 6068 & 6032. Those would be good areas to look for long setups on pullbacks. If we follow through today with more buying the upper level of resistance is 6129 and then up to new highs around 6186.

NQ – Week to Week

NQ has not triggered the Bull line which sits at 22,032. If that does break we move to bull mode but for now, NQ remains in a bear pattern. Upside targets for today are 21,967 and then 22,032. For the downside, 21,658 should hold. If we stay below 21,54 we will most likely fold down for multiple-day selling. It is a tale of two indexes as ES presents bullish and NQ still bearish.