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Market Review

Today was a surprise trade. You know the one. The one that takes you by surprise and off guard. Takes your stop and the stop on your next order too! It’s going to happen. It’s just a part of trading. WB might have said the shorts are getting squeezed. And in chat, a lot of talk about shorts puking…

The day started as a good short trade but ended the opposite. 

The cycle was S4 day and it’s been iffy all week. Not a defined trend or least consistent from one day to the next. In my Market Recap Videos, I’ve been saying that supply was hitting each rally. Well today, at least for the first thirty minutes of trade. Supply was hitting it. Perhaps the tell was in the Globex as they hit it hard at the 08’s. Not my words, but an old dog trader in IMPRO Chat. 

Big tech earnings after the open. They just kept driving it “to the moon!” as Ralph Kramden might have said. That is if he was trading…

For a while we did some backfilling at the Globex range, then we broke through. Some games were played by and with the bigger traders. There was something for everyone. Now, whether Congress got an edge on for tomorrow, who knows. The fate of our privacy was sealed, outlined, and decided that I do know!

Two pushes through as the tech earnings were released as in a phase modulated pulse wave that’s what the market saw after the close. 

In the above Emin / FANG chart, you can see how the price is moving up easily after the last spring has sprung. In the AM TURN (in your email inbox before the opening bell) I indicated the longs will need to protect the:

Longs: If you are to get long it’s in defended the Tuna/Billfish position at the lower level. However, currently (before jobs number) still have room at the 3206 level. If price losses the 3199 handle, not good to be long.

Yes, we lost it down to 3295 from (5 min) 10:05, 3195 to 10:25 (low), 3195.75 (higher low), 10:55, 3204.00 (higher low), and then “big money” brought it right back up! 

Eye’s of Wycoff: Selling Climax, Automatic Rally, Secondary Test, Jump Across Creek (sign of strength), and Back (last point of support) 3204.00 handle. That’s what that was… All rolled up in 50 minute base of accumulation just waiting to spring on the market with buying pressure lifting the offers all the way up to where you see that white ball in FANGS (top chart) and the EMINI (bottom chart).

Eye’s of me: Notice the white ball lines up perfectly with the top and bottom chart? Notice the rectangles top line lines up with the white ball of the bottom chart? That be the Emini “Laddie”. Cause and Effect, Effort Result. The cause was built up in the 10:05 to 10:55 base mentioned above. The effect was the top at 12:20 marker.

See the volume spike? 35K lots. That is accumulation volume (Effort Result) taking out all the offers from the RTE and Globex trading range. Now, we have a potential resting spell for further upside movement. See at 2:20 to 3:00 volume is coming in on those lows? See the lifting supports? Yes, this puppy is going higher. To the Moon! 

Well not really. That would depend upon the cause that has been building up during the first white ball to 3:00 marker or so. The longer that resting spell occurs, the more late to the party bulls will get out in the chop. The fewer longs, the fewer longs that will want to take profit as the Composite Man marks the price up.

You could say some old school “Bag Holding” as my good late friend PT Wall might have said. 

I know that’s a bit much to take in. If you want to see the Market Recap Video I made for my Subscribers to the AM TURN; here it is (click on the picture below):

Looking Forward Friday, July 31, 2020

Lens of Wycoff: (60 min) After today’s close the hunger games began and price riped up to the top of the distribution area defined on Jul 21 8:30, 3273 even. Putting Jul 30, 18:30 3273.6 a 6/8 upthrust (0.75). Pulling back finding support at Jul 31 2:30, 3245.6 (see above) with a rally back to the supply line. (0.6 = 6/8 = 0.75 Wyckoff used decimal eights)

Lens of Wycoff: (5 min RTE) Strong push up from the Tuna/Billfish position. Potential final Spring with test at 10:55, 3204 even on less volume. Spring 35K, test 18K just over half finding higher support.

Eyes of WB: Bears dropped the soap on that test. Giving the bulls the advantage to reclaim the need of 3236 and regain the 3246 target and higher.

Eyes of me: After the maylay was over 9:30 to 10:10:05 marker it was almost shooting fish in the barrel as the back up to the creek completed at the halfback (see the video) and then the mark up / resting spell for further upside movement was reflected in the count and price/volume behavior.

Tuna / Billfish: I’m thinking they got a little more there at the bottom. You know, where all that volume was…  

It’s a bit early to tell but we could drift down to the three hour resting spell seen from Jul 30 12:20, 3231.4 to Jul 30 3:20, 3241.4 handle. It’s a Friday, the end of the week. The end of the month. By my eye yesterday was mixed. The general market / DOW securities did not respond in kind to the Cash/Emini. Some buying on the sly. Will they hold it? Depends upon what the Composite Man / Big Money has in mind for next week.

I give you the best of the old school market technicians, JP Morgan, Herriman, Kearn, and Livermore. The traders of the 1930s. How they may have seen the market. I use the lens of Richard D. Wyckoff Principles and Procedures and through the eyes of WB’s hidden internal clock. The clock that controls all turns intraday every day.

We had a good week this week. Our subscribers have been very lucky with the levels given: 26 points Monday, 0 points Tuesday, 14 points Wednesday, and -8 points Thursday. Total for the week 32 points, that would be $1,600 on 1 lot and $4,800 on 3 lots.

That’s due to the volatility that crept back into the market. I’ll be the first to say, it does NOT happen every week. When it does it’s a beautiful thing! I would love for you to join us. If you have not taken the time, now would be a great time for you to subscribe.  


Economic Calendar


Closing Prices


In the Tradechat Room

MiM

It was all about earnings into the close yesterday as the market moved sideways. There was a slight buy at the 15:50 MOC reveal which moved the markets 5 points and was shadowed on the 15:50 candle.

July closes today so we would expect to see a decent MOC to balance out the month.

Questions?  Please email me: Marlin@mrtopstep.com

Get the skinny when we get it:  Join the MiM. 


Covid-19

Top 10 Worst
Top Ten Best

We continue to track Covid-19 across all 50 states, DC, and Puerto Rico to gain a better understanding of what is happening. While detected cases continue to expand, we are not seeing the equivalent expansion in hospitalizations and deaths. Our table uses 7-day averages and takes a 5-day linear regression slope in order to detect changes as quickly as possible. We score each state by a normalized slope and ranking in each category (infected, admitted, and deaths).

Need to quicken the pace in the downside move here on new cases in order to turn the corner on hospitalizations and new deaths. The delay between cases and hospitalizations is about 12 days in FL and another 4 days for deaths to show up.
Texas is doing good. We expect a win today on the under side of the O/U line.
The downside trend in CA’s numbers are now set and we expect today to come in on the underside of the O/U line continuing the trend in dropping the number of new cases.

We continue to focus on our top 3, Florida (20M pop), Texas (30M), and California (40M), looking at daily deaths, but more importantly, changes in the count.

As mentioned above we expect to see the new deaths in Florida to continue to rise over this weekend with some down-trending hitting next week. That will be good news as the top for now will be known.

Texas numbers are screwed up due to their addition of latent cases. We do expect that TX will lead Florida in a reduction in death numbers next week.

Looking over the horizon in CA, we also expect to see new deaths drop either the end of next week or the beginning of the week after.

Over / Under

These are the over/under numbers for 7/31/2020. In order to push the 7-day average lower, today’s reported numbers need to be lower than the target number. A new case or death number that is higher will increase the 7-day average.

Yesterday’s over/under numbers and actual are also in the table.

YesterdayYesterdayTodayToday
StateCasesDeathsCasesDeaths
Florida10,249 / 9,956173 / 25212,444136
Texas9,507 / 8,800173 / 848,701196
California12,040 / 10,197157 / 1949,718159
New York811 / 77710 / 137539
Yesterday’s number are the over-under number / actual. An actual that is greater than the over-under number will send the 7 day average higher (not good) a lower number will send the 7 day average lower (good).
Use today’s number to watch the releases to determine the trend.

To use our table, go to https://t2r4.com/cv19/views. Each column is sortable and if you click on a cell you will get a time-based chart of the state.

Wear your masks!
Stay Home!


Chart of the Day


Top Stories on MTS Overnight:


Globex

(ESH20:CME) GLOBEX Session(ESH20:CME) Day Session 
High 3257.00Opening Print: 3218.25
Low: 3207.75High 3252.00
Volume: 390KLow: 3195.00

ES Settlement 3248.75 Down 7.5 handles or -0.23%

Total Volume   1.95 Million

S&P 500 RECAPTrade Date 7/30/ 2020

#ES Money Maker Chart

#ES Big Early Down Then Big #NQ RIP

The ES opened down 38 handles at 3218.25, rallied up to the 3224 area and then pumped down to 3195.00 after Trump said the election could be ‘fixed’ and ‘rigged’ and floated the idea of delaying the election at a White House briefing. After the drop, the ES started climbing as the NQ started reversing higher. After climbing above the opening range the ES and NQ started to accelerate to the upside and by 10:30 CT  the ES  rallied up to 3229.50, pulled back down to 3222.50 and then continued to make a series of higher highs all the way up to 3239.50 at 11:17, up 44.25 handles off the 3195.00 low. While this was going on the NQ that was down over 100 points was up over 70 points. The ES then fell into a big back and fill pattern then started moving up again. At 2:00 the ES traded 3238.75, traded 3240.00 at 2:30 and traded 3237.00 as the 2:50 cash imbalance showed $270 million to buy. The ES traded 3239.75 on the 3:00 cash close and settled at 3248,75 on the 3:15 futures close, down 7.5 handles or -0.23% on the day. 

In terms of the overall price action, it really didn’t matter that the ES fell sharply early in the day because the tech earnings were running the wheel. All the early sell-off did was add shorts that helped fuel the markets higher as the short-covering piled in. In terms of the day’s overall trade, total volume was double Wednesday’s volume at 1.9 million contracts traded. 

Our View

S&P 3300+++ ON TAP

I don’t know if the ES is going to trade 3300 today but I feel very confident it will soon. There are bundles of buy stops that start above 3276 up to 3281 and again above 3286.70 all the way up to 3310. As we all know, ‘no stops go untouched in the S&P’. Our lean again is it to sell a gap up open, cover into the pullback and look for the mid-morning low, shut down after 11:00 and come back for the MIM and the late Friday RIP. 

Have a good weekend and be safe…

Danny

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.


Market Vitals Technical Analysis

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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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