Can This Rally Hold Without a Larger Pullback? Doubtful
Nasdaq up 8 straight.
Danny Riley
November 08, 2023
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Our View
Since Israeli troops entered Gaza, the Nasdaq has closed higher eight sessions in a row for a total gain of 1,272 points or 9% — and its longest streak in two years.
The tech-heavy index is now up 30% on the year. The ES and the YM have gained in seven straight sessions, pushing the S&P up 14% on the year. I called for the bounce, but I also didn’t think the markets would rally so much so fast without any real pullbacks.
MSFT is at a multi-month high, Apple’s out of the graveyard, Nvidia’s up almost $70 or 17.8% from its low last Tuesday.
All the big tech names are ripping and you know why? Because the low is in for bonds, yields are going to fall sharply and stocks are going to rally another 10% to 13% by the end of the year. Or at least, that seems to be the mindset right now.
I was long the ES from the 4158 level and got out with a 65-point profit, and despite my scalp trades making money, I left a lot of money on the table. I had it and I didn’t hold.
Our Lean — Danny’s Trade
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MiM and Daily Recap
ES and NQ recap
The ES traded down to 4366.00 on Globex and opened Tuesday's regular session at 4384.00. After the open, the ES traded up to 4385.00, pulled back to 4372.25 at 9:41, and then traded up to a new high at 4397.00 at 10:06. It then rallied up to 4402.50 at 11:45, pulled back to the VWAP at 4385.75 and then traded up to 4402.00 at 2:37. After the push, the ES sold off down to 4393.50 at 3:15 and then bounced back up to a new high at 4403.25 at 3:47 as the early NYSE imbalance showed $519 million to sell.
The ES traded 4400.25 as the 3:50 cash imbalance showed about $1 billion to sell, sold off down to 4389.50 at 3:56 and traded 4396.50 on the 4:00 cash close. After 4:00, the ES traded up to 4397.75 and settled at 4397.50 on the 5:00 futures close, up 17.25 points or 0.39% on the day.
In the end, it was a buy-the-pullbacks kind of day. In terms of the ES's overall tone, it was firm. In terms of the ES’s overall trade, volume was low: 220k traded on Globex and 1.094 million traded on the day session for a total of 1.314 million contracts traded.
Technical Edge
NYSE Breadth: 41% Upside Volume
Nasdaq Breadth: 60% Upside Volume
Advance/Decline: 42% Advance
Last week: Back-to-back 80/80 days for A/D and NYSE Breadth
VIX: ~15
S&P 500 — ES Futures
Economic Calendar
