Welcome to Turnaround Tuesday

Was a 3% dip enough?

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Our View

I don’t know if the low is in and neither do you. The recent weakness came at a time where we knew a pullback was a “when” not “if” situation, but HandelStats is now saying that according to his stats, the high for July is not in yet. 

That doesn’t change anything for me. I said I didn’t think the ES could even fall 5% and from its high to low it fell 3.13%. I can’t say for a fact that we don’t trade back down, but if we do, I’m a buyer.

MiM and Daily Recap

After President Biden stepped aside, the ES opened near unchanged and rallied all the way up to 5604.75 and opened Monday’s regular session at 5593.50. After the open, the ES traded 5594.50, sold off down to 5576.50 at 10:12, traded all the way up to 5607.75 at 10:51, pulled back to 5597.00, rallied up to a new high by 2 ticks to 5608.25 at 11:09 and then sold off ~35.5 points down to 5572.75. Not long after that, I posted this: 

At 12:24, the ES traded up to 5586.75, dipped to a higher low at 5580.50 at 12:33 and then ripped up to a new high at 5612.00 at 1:36 — a 39.25 point rally — pulled back to a 5604.25 double bottom at 1:48, and then traded up to 5616.00 at 2:39. After the high, the ES sold off down to 5604.75 at 3:03, rallied up to 5613.75 at 3:13 and then started to slide down to 5608.50 as the NQ went offered and then rallied up to 5614.75 at 3:42. The ES traded 5610.75 as the 3:50 imbalance showed $3.2 billion to sell, traded down to 5606.50 and traded 5609.50 on the 4:00 cash close. After 4:00, the ES traded down to 5606.00 and settled at 5608.25, up 55.5 points or +1.00%, the NQ settled at 19,980.75, up 277.75 points or +1.41%   on the 5:00 futures close. Crude closed down .40 cent at 78.24, the bonds closed down 9 points at 118.27, gold was down 0.90 at 2,398.20 and Bitcoin settled at 68,870, up 625 points or +0.92% on the day.

In the end, like the Trump assassination attempt, the Biden resignation was a ‘buy the news’ event. In terms of the ES’s overall tone, the ES and NQ were firm. In terms of the ES’s overall trade, volume was lower: 225k ES traded on Globex and 1.41 million traded on the day session for a total of 1.64 million contracts traded.

Technical Edge

Guest Post — Tradrr

Leaning on shorts as we look to gain a large set of information regarding not only the US inflationary numbers but those of Japan, Germany and the UK.

Tracking ZN as a sort of anchor for correlated markets will prove useful as information is dripped in throughout the week.

1. Over the weekend there was information that has one candidate seemingly a “Shoe in” to win creating an expectation in markets of higher inflation and less chance of a rate cut to occur. Shorts have an opportunity to lean on zone 1 so long as the assumed story for the election continues with caution to be had if prices begin to grind through.

2. Getting through zone 2 should open up a test to the previous week’s lows and fill in some valleys therein below.

Should there be uncertainty introduced in the news we have the potential to ping pong between zones and fill out the valley we have apparent with this week’s current traded prices which could build up a case for bulls if buyers are more aggressive in the defense of zone 2.  

To learn more about Tradrr, please visit them here.

Economic Calendar

For a more complete Economic Calendar see: https://mrtopstep.com/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!