Consumer confidence and JOLTS to help kick start volatility today.

Follow @MrTopStep on Twitter and please share if you find our work valuable!

Our View

While I’m still inclined toward a bullish stance, it's clear that the market gets choppier as we approach the election. By 3:00, the ES’s range was a mere 20.75 points, from a high of 5880.75 to a low of 5860.00, making it a challenging environment with low trading volume of 775,000 contracts (including the 202,000 on Globex). As you know, I tend to be bullish, but the narrow range trade makes this a tough market. Everything feels like a false start, and if you’re caught trading between 11:00 and 3:00, it’s likely a losing game.

I’ll admit I haven’t been entirely on point lately, losing over 8.6K in the last two days. While it’s not catastrophic, most of it could have been avoided if I’d followed my own advice: avoid the midday chop, which is set to worsen as we near the election.

MiM and Daily Recap

The ES traded up to 5884.50 on Globex and opened Monday's regular session at 5879.75. After the open, the ES reached a high of 5881.75, then sold off to 5871.50 at 9:32 before dropping 15.25 points down to 5866.50 at 10:06. It then rallied 13.25 points to a lower high at 5879.75 at 10:30, only to fall 19.75 points down to 5860.00 at 12:03. Following this, it rallied 11.5 points up to 5871.50, dropped 11.5 points to 5860.00, and rallied again by 12.25 points to 5872.25.

The market continued its pattern, pulling back 5.75 points to 5866.50 at 2:03 before rallying 6.25 points to 5872.75. Then, it sold off 10 points to 5862.75 at 2:48, rallied 9.5 points to 5872.25, and dropped again by 10.25 points to 5862.75 at 3:02. After this low, the ES climbed to 5871.50 at 3:33, then pulled back to 5867.00 at 3:42. It traded at 5868.25 as the 3:50 cash imbalance showed $1.8 billion to sell, eventually declining to 5859.50 at 3:57 before closing at 5862.50. Post-4:00, the ES rose to 5866.50 and settled at 5864.25, up 22.75 points or +0.39%. Meanwhile, the NQ settled at 20,507.25, up 31.25 points or +0.15%; the YM closed at 42,624, up 303 points or +0.72%; and the RTY ended at 2,258.00, up 36.5 points or +1.64%. In commodities, natural gas futures on the NYMEX fell 8.1% to $2.353/mmBtu, while West Texas Intermediate crude for December delivery dropped 6.1% to $67.38 per barrel following news that Israel’s strikes on Iran avoided energy facilities.

The market action ultimately felt like a "chop shop," with the large opening gap seemingly exhausting much of the buying power early. The ES’s overall trade volume was low, with 202,000 contracts traded on Globex and 784,000 during the day session, totaling 986,000 contracts.

Technical Edge

Fair Values for Oct-29-2024 are as follows, SP: 35.34 NQ: 138.44 Dow: 202.47

• Daily Market Recap 📊

  • NYSE Breadth: 72.34% Upside Volume

  • Nasdaq Breadth: 72.74% Upside Volume

  • Total Breadth: 72.67% Upside Volume

  • NYSE Advance/Decline: 66.38% Advance

  • Nasdaq Advance/Decline: 67.47% Advance

  • Total Advance/Decline: 67.08% Advance

  • NYSE New Highs/New Lows: 91 / 28

  • Nasdaq New Highs/New Lows: 127 / 86

  • NYSE TRIN: 0.70

  • Nasdaq TRIN: 0.70

  Weekly Market 📈

  • NYSE Breadth: 38.81% Upside Volume

  • Nasdaq Breadth: 56.39% Upside Volume

  • Total Breadth: 50.04% Upside Volume

  • NYSE Advance/Decline: 21.25% Advance

  • Nasdaq Advance/Decline: 31.24% Advance

  • Total Advance/Decline: 27.41% Advance

  • NYSE New Highs/New Lows: 290 / 81

  • Nasdaq New Highs/New Lows: 320 / 245

  • NYSE TRIN: 1.53

  • Nasdaq TRIN: 0.69

  • VIX: ~19.91 (up)

Guest Posts: Daniel Salguero @traddr.com

Starting this week off with a weak high from previous weeks and a weak low at the bottom of the profile that began in early October. Today, we have JOLTS data coming out after the open, along with tech earnings, month-end flows, and weak levels lingering from the past month, all capped by next week’s elections.

In short, expect a bit of volatility, with weak levels likely tested, if not cleaned up, as we approach next week's major events and beyond.

Room Summaries

Polaris Trading Group Summary - October 28, 2024

The session started with a “Line in the Sand” (LIS) at 5865, with this level being a significant support that held well overnight. PTGDavid highlighted an initial bullish target zone of 5880-5890, which was achieved early, signaling some initial upward momentum. The opening trading range was relatively narrow at just 10 handles, and David noted that volume was essential to breakouts—a key insight for traders observing the low volume throughout the day.

During the morning, PTGDavid managed successful trades in crude oil (CL), hitting all long targets. However, the NASDAQ (NQ) trades struggled due to choppy and tight price action, preventing clear directional momentum and making it difficult to define a trading edge. With no sustained breakout and the 5865 LIS repeatedly tested, David advised caution, remarking that traders should avoid getting “caught in the chop.”

The afternoon session remained subdued with low volume and limited range, with a key support level at 5860 creating a double bottom and a potential stop-hunt area. The sluggish market continued through the close, with David noting a $1.5 billion MOC sell imbalance but little actionable movement. By the end of the day, the 5860 support level held firm, setting it as a critical marker for Tuesday’s session.

Key Takeaways:

• Successful trades in crude oil (CL) hit all long targets.

• 5865 LIS and 5860 key support were central to the day’s strategy.

• Volume was insufficient to drive breakouts, emphasizing the need for patience in low-momentum environments.

• Traders were reminded to avoid trading during “choppy” conditions, especially when no clear edge is present.

Overall, it was a cautious, low-volatility day with traders waiting for better momentum, ideally setting up for stronger opportunities on Tuesday.

• Equities & Crypto: The S&P 500 and Nasdaq 100 rose 0.3%, while the Dow saw a more significant gain of 0.7% on Monday. Bitcoin surged past $71,000, reaching its highest point since June, as both U.S. presidential candidates show positive stances on cryptocurrency.

• Trump-Linked Stocks: Trump Media & Technology Group (DJT) surged 240% over five weeks, driven by speculation on Trump's potential election win. Analysts suggest a “buy the rumor, sell the news” approach, as DJT’s future hinges on the election outcome.

• US-China Relations: The Biden administration announced restrictions on U.S. investments that could aid China's military or cyber capabilities, effective January 2, aiming to curb China’s technological advancements with potential military applications.

• Oil Market: Oil prices fell 6%, the largest drop in two years, following Israel’s assurance to limit military strikes to specific targets, alleviating energy market concerns.

• Ford Update: Ford shares dipped 4% post-earnings as the company cut its guidance, emphasizing a pivot from EVs to hybrids. Hybrid sales have notably risen, with Ford capturing 77% of the U.S. hybrid truck market.

• Earnings Highlights: Premarket earnings reports include McDonald’s, Pfizer, BP, and others, with notable after-market reports from Alphabet, AMD, and Visa.

• Economic Indicators: Focus today includes Consumer Confidence and JOLTS at 10:00 a.m. ET, with earlier data on Trade Balance and Wholesale Inventories.

• Trading Notes: Volatility remains moderate, with “whale” traders showing a short bias entering the U.S. session. The ES index sits within an uptrend channel, providing both bullish and bearish opportunities. Key levels: Resistance at 5944/47, Support at 5764/67 and 5745/50.

Overall, a mixed economic environment provides room for both bullish and bearish plays across multiple sectors today.

Economic Calendar

Full 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!