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Polaris Trading Group: Taylor 3 Day Cycle  Commentary      Author: David D Dube (PTGDavid)

Tuesday’s Session was Cycle Day 3 (CD3): Bullish Gap vaulted price above CD2 RTH High (2770) and traded above CD1 RTH High (2809). Bid held strong all session fulfilling and exceeding this Cycle’s Objectives. Price has firmly retraced +50% of the February – March peak-to-trough decline. Current momentum squarely favoring bulls as 10 ema (2682) is solidly upsloping. Notwithstanding, air-pockets of downside turbulence are likely to occur, so be sure to keep your trading seatbelts securely fastened.

  …Transition from Cycle Day 3 to Cycle Day 1

This leads us into Cycle Day 1 (CD1): Objective for this cycle day is to “probe for a new secure low” from which to begin the next cycle’s rally. Previous session’s momentum may push price higher before the next decline develops, so this day will be key as to the current bullish bias.

For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:

 Link to access full Cycle Spreadsheet >> Cycle Day 1

Economic Calendar

Closing Prices

In the Tradechat Room


Buy, but sell. Our run into the MOC was inline with the MOC while the initial A move was up to the 2846 area, that reversed and closed 2838. Need nimble trading into that close.   Our breadth on $ and # remained strong but all we could do is slip sideways.  

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Chart of the Day

Top Stories on MTS Overnight:


(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 2813.00Opening Print: 2807.50
Low: 2752.50High 2846.00 Late
Volume: 320,000Low: 2796.25 Early

ES Settlement: 2843.00
+82.75 Handles or +3.0%

Total Volume: 1.6M

S&P 500 Futures: ES 2850, Objective Meet

The ES rallied up to 2813.00 on Globex and traded 2807.50 on Tuesday morning’s 8:30 CT futures open. After the open, the ES rallied up to 2836.25 and sold off down to 2798.25 at 10:20 CT. After the low, the ES traded back up to 2814.00 at 10:33, pulled back down to 2821.00, pulled back a little then rallied up to 2838.50 at 12:53. After selling off a few handles the ES back and filled and started trading back up to2841.25 at 1:20.

At 2:00 CT the ES traded 2838.00 (up 99 handles from the same time Monday), traded 2834.75 at 2:30 and traded 2837 as the 2:50 cash imbalance MIM showed $900 million to buy. On the 3:00 cash close the #ES traded  2837.00 and settled at 2843.00, up 82.75 handles or +3.00 on the day. 

In terms of the day’s overall tone, the S&Ps were firm but the Nasdaq led the markets higher. In terms of the day’s overall trade, total volume was very LOW at 1.6 million contracts traded minus 320,000 from Globex making total day volume the 1.28 million contracts traded on the day session.

Our View

Crude Back To $20.00s and Gold Going to $1,800

I am not real sure why President Trump is trying to save the oil industry? I think it comes down to something called ‘supply and demand’ and right how there is too much oil and no one to buy it. On the other side of this is gold. Back about 3 or 4 weeks ago gold broke down through$1,500 and I asked the PitBull where he had support and he said $1,450 and I think that was pretty close to the low. Clearly it’s been a risk-on type trade that has all sorts of moving parts. The other thing is the VIX settled at 37.76, down 8.28%  crossing below its 50-day average for the first time in almost 2 months

Our view, as the VIX has dropped, the ES has got choppier. We are not seeing the big 300 handles a day swing. The fed set out to calm the markets and did but there are big gaping holes in the economy that are going to take a very long time to fix. Do I have faith the US will pull out of this? Yes! Do I fear restarting the country so fast? No, I do not. There seems to be this forward mindset that Trump can just start opening industries up and not have any kind of back up plan. Funny thing is by November it will be flu season again and that’s when the elections are.  Our lean, the ES is up almost 670 handles from its recent low. I know the futures want to keep going up but I am getting a feeling there may be a good sale coming. 2880-2900 should be good resistance if not lower. 

Danny Riley is a 39-year veteran of the CME  trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.

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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. Decisions 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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