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When the Bus is Packed, the Bots Attack
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Our View
For everyone’s information, I try to write the OP while the markets are open, but recently, I’ve been doing it after the close. I recently installed TradingView charts and platform, and while I really like the desktop version, I need to learn how to use it properly. I have one of those big curved screens, so the charts took up too much room, and I was executing trades off my laptop, which was also a pain in the ass.
I have very basic trading principles, and one of them is that the S&P never does what most people want it to do when they want it to. Friday’s sell-off after the jobs report was another great example. I can’t say I 100% understand why, but I remember years ago the PitBull made a ton of money momentum trading. If the S&P closed weak, he’d sell the close, and if it closed strong, he’d buy it. But over time, the win-loss ratio was mostly losers. I told him 20 to 25 years ago that it didn’t work, but he still does it.
Like I said, I don’t fully understand it, but MrTopStep has another rule called “the bus is too full,” and that bus was way too full late Friday when volume hit 1.73 million and 961K during Monday’s trade, which created thin to win. The CME makes billions selling data to high-frequency and algorithmic trading firms, and somehow, they’ve coded their bots to recognize when the crowd is offside and automatically move the other way, electing buy stops, which makes it easy to run buy programs.
This isn’t anything new; it’s been going on for years, but some people are slow learners. Am I surprised by the rip-and-dip price action? Not at all, it’s exactly what I expected, and I expect more of it this week as China strikes back. Xi doesn’t have a poker face like Canada and Mexico. And it doesn’t look like Putin is ending the war anytime soon either.
Our Lean
The fireworks start Wednesday with the CPI number, unless Trump drops a few tape bombs today. This is a get-what-you-can-make market. Big dips and rips, but the problem comes when you over-expect. Take your profits and move on to the next trade.
Our Lean: 6111-6120 is still a problem. I think you buy the 30 to 50-point pullbacks, but you also need to be on guard for headline hell.
MiM and Daily Recap
Today’s ES session started on a strong note in the Globex session, with an early rally setting the tone for the day. The Sunday market opened at 6016.00 and swiftly climbed all night to a high of 6087.00 by 09:00, reflecting a gain of 71.00 points (1.18%). At the cash open the market traded 6080.75, and a nearly 20-point pullback ensued, reaching 6067.75 at 09:39, marking a 19.25-point decline (-0.32%). Buyers quickly absorbed the dip, driving ES to a new high of 6094.50 at 10:48, a 26.75-point move (0.44%).
As the morning progressed, a pullback to 6079.00 at 11:33 showed some hesitancy, but a rebound followed, with ES touching 6085.50 at 11:57. The session maintained an upward bias, and despite brief dips, momentum remained strong.
In the early afternoon, ES found support at 6077.25 at 12:12, marking a 13.25-point decline (-0.22%) from the previous high. A strong rebound followed, taking ES to a fresh high of 6096.00 at 14:21, adding 23.75 points (0.39%). However, resistance emerged, leading to a slight pullback to 6088.00 at 14:51.
In the late afternoon, ES attempted to push higher again, reaching 6093.00 at 15:12, but momentum faded, causing a final dip to 6083.00 at 15:50, a 10.10-point decline (-0.17%). The market stabilized into the close, with ES settling at 6087.75.
The final cleanup session saw minimal movement, with ES closing at 6087.75, a negligible decline of 0.50 points (-0.01%) from the regular session close.
At the end of the trading day, ES closed at 6087.75, marking a 71.75-point gain (1.19%) from the full session open but 39 points from the Friday cash close or 0.64%. The total volume for the day came in at 961,323 contracts, indicating strong participation throughout the sessions.
The market on close (MiM) had now story to tell on Monday. Even split on symbol count with buy and sell imbalance with a small differential.
In the end, the Super Bowl halftime show was disappointing. In terms of the ES, the overall tone was firm. In terms of the ES’s overall trade, volume was low, with 961K contracts traded.
Technical Edge
MrTopStep Levels:
Fair Values for February 11, 2025:
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SP: 21.31
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NQ: 87.66
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Dow: 106.88
Daily Market Recap 📊
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NYSE Breadth: 62% Upside Volume
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Nasdaq Breadth: 74% Upside Volume
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Total Breadth: 72% Upside Volume
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NYSE Advance/Decline: 61% Advance
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Nasdaq Advance/Decline: 56% Advance
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Total Advance/Decline: 58% Advance
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NYSE New Highs/New Lows: 78 / 62
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Nasdaq New Highs/New Lows: 167 / 187
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NYSE TRIN: 0.82
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Nasdaq TRIN: 0.44
Weekly Market 📈
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NYSE Breadth: 48% Upside Volume
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Nasdaq Breadth: 57% Upside Volume
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Total Breadth: 54% Upside Volume
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NYSE Advance/Decline: 51% Advance
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Nasdaq Advance/Decline: 48% Advance
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Total Advance/Decline: 49% Advance
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NYSE New Highs/New Lows: 204 / 166
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Nasdaq New Highs/New Lows: 344 / 394
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NYSE TRIN: 1.06
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Nasdaq TRIN: 0.76
Trading Room Summaries
Polaris Trading Group Summary for Monday, February 10, 2025
The trading day started with an overnight fulfillment of initial targets outlined in the Daily Trade Strategy (DTS) briefing, with additional upside targets at 6084, 6096, and 6106. The Sunday Globex “Dip n Rip” setup continued to perform well for the third consecutive week.
Morning Session
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Crude Oil (CL): Initial OPR Long Target 1 was filled.
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Nasdaq (NQ): OPR Long Target 1 & 2 successfully hit, with a stop trail in place to manage risk.
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Key Level Validation: Volume confirmed the importance of 6084, with high volume building at this level.
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Market Lean: Price action remained bullish, with VWAP at 6070 holding and Bull Stacker support.
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Pullbacks to OPR High (6082) were respected, reinforcing the long bias.
Midday & Afternoon Trading
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Rithmic Data Feed Issues: Around 11:42 AM, reports surfaced of login issues with the Rithmic data feed, affecting some traders.
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Cycle Day 2 Observations: Price held above VWAP and Open Range Midpoint, with resistance at 6090.
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Post-Lunch Trade: Buyers maintained control, as the opening range held on pullbacks. The focus remained on long opportunities, with a 6090 breakout opening the path higher.
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2 PM “Shake n Bake” Move: A quick drop and pop provided a potential opportunity for traders.
Closing Action
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Late Session: The expectation of a Mutual Fund Monday push did not materialize.
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3:30 Dip & MOC Close: A minor dip occurred, but the MOC close was lackluster, with the market remaining in a holding pattern ahead of Wednesday’s CPI print.
Key Takeaways & Lessons Learned
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Successful Execution: Multiple targets were hit, particularly in NQ, demonstrating strong adherence to the plan.
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Volume Confirmation: The 6084 level was validated as a key area of interest, reinforcing the importance of volume analysis.
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Market Awareness: Recognizing the market’s hesitation ahead of a major event (CPI) helped manage expectations.
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Trade Management: Proper use of stop trails ensured risk was controlled while allowing for profit-taking.
Overall, a solid day with strong trade executions despite an uneventful close. Traders remained adaptable and focused on long setups, taking advantage of pullback opportunities.
Discovery Trading Group Room Preview – Tuesday, February 11, 2025
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Stock Futures Weak: Markets are down ahead of new Trump tariffs and Fed Chair Powell’s testimony to Congress.
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Tariffs & Trade Uncertainty: Trump imposed a 25% tariff on steel and aluminum imports, adding pressure on Canada and Mexico. The administration is also scrutinizing a potential Hewlett Packard (HPE) and Juniper Networks (JNPR) merger.
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Regulatory Pressures: Hedge fund and private equity tax breaks face threats, while Big Banks face bipartisan criticism over customer policies.
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Musk’s OpenAI Bid Rejected: Elon Musk’s $97.4B offer for OpenAI was declined by CEO Sam Altman. Meanwhile, Meta (META) plans further job cuts to prioritize AI talent.
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Tech Giants Continue AI Investments: Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Meta (META) plan to invest $325B collectively in AI this year, reinforcing bullish sentiment but also increasing market concentration risk.
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Earnings Today:
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Premarket: BP, Coca-Cola (KO), Humana (HUM), Shopify (SHOP), and others.
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After-Hours: AIG, Super Micro Computer (SMCI), DoorDash (DASH), GILD, and more.
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Economic Calendar: Quiet today, but tomorrow’s CPI report is key. Powell testifies at 10:00 AM ET, with additional Fed speakers throughout the day.
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Market Technicals: ES remains range-bound, with volatility shrinking. Key levels:
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Resistance: 6125/22s, 6273/75s, 6467/72s
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Support: 5927/30s, 5893/90s, 5697/92s
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Whale Bias: Leaning bullish into the U.S. open on light overnight volume.
Market remains on edge—watch for Powell’s testimony and any fresh tariff surprises from Trump.
ES -Week to Week
The intraday bull/bear line is now at 6075, marking the pivotal level for today’s trading. A sustained move above this level signals a bullish continuation, whereas failure to hold above it may lead to further downside pressure.
For the bullish scenario, the next key resistance levels to monitor are 6096 and 6120 which is the range high target for the day. A breakout above these levels could open the door to further highs, potentially reaching 6147 and 6165.
On the downside, staying below 6070 increases the likelihood of testing support levels at 6040 and 6028 which is the lower range target for the day. A deeper pullback may see price action targeting 5980.
ES remains in a long-term bullish mode and only trades below 5894 would change that.
NQ – Week to Week
The long-term bull/bear line for NQ is now at 22,080.50, marking the key level where momentum shifts from bearish to bullish. While the market remains below this level, bullish conviction is still uncertain. A sustained push above it could trigger stronger upside movement and put the NQ where ES has been for a couple of weeks now.
For today, the intraday bull/bear line is at 21,770, acting as the dividing line between bullish and bearish sentiment. If buyers can maintain control above this level, they will aim for 21,894, a key resistance level. Beyond that, 22,013 is the next upside target and the upper-range target for the day. Should that break, watch 22,080.50, where sellers may step in aggressively. If momentum extends beyond this zone, 22,224 could become a stretch target.
On the downside, a failure to hold 21,770 puts the market at risk of testing 21,632, which serves as an initial downside support level. If sellers gain control, 21,526 becomes the next target which is the range low target for the day.
With price currently hovering near a key inflection point, today’s battle will be centered around 21,770. Holding above it strengthens the case for buyers, while breaking below it could bring renewed selling pressure. Traders should watch these levels closely as the session develops, with volatility likely to remain in play.
Calendars
Today
Important Upcoming
Earnings
Recent
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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!
This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.
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