The Fed Giveth and The Fed Taketh Away

Up-and-down action from yesterday's Fed talk

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Our View

I know that I sometimes get overly concerned, but I assure you it's not just for me. I worry about the dollar and interest rates, and more importantly, what this is going to look like for my 29-year-old daughter and her 3-year-old baby in 10 or 20 years. 

I was raised in an Irish Catholic family with six girls and four boys. Growing up, I liked playing sports, and believe it or not I was a very good left-handed catcher and an excellent swimmer. I was raised that you “don't hit girls” and that only by going to school could you better yourself. That second part all changed when Riley Printing Company went out of business. 

I was graduating from high school and had plans to go to college, but I couldn’t put that further financial stress on my dad so I headed down to the trading floors of the CBOT and CME. 

While I beat out the well-educated guys on the floor from JPMorgan, Goldman, Citi Bank, Merrill Lynch, and others, I still look back and ask myself what if I had gone to Notre Dame like my dad and my brother? 

I had no problems getting into hedge funds and banks, but I always wonder if I would have gone further if I had a degree. I know, I know…a degree does not mean you are going to be successful. Somehow though, the educational part — or lack thereof — is what pushed me to work harder than the other guys. When things went bad at my S&P desk, I worked harder. 

To summarize, we all have been dealt a hand of cards. We get to choose where we go in life; do we do it sitting down or do we fight? Like the PitBull always says, if you want to make the money, you gotta do the work.

Our Lean — Danny’s Trade

This is Danny Riley’s personal trading plan for the day.

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MiM and Daily Recap

The ES traded down to 4547.00 on Globex, overnight inventory was 81% short, and opened Tuesday's regular session at 4555.25. After the open, the ES traded 4556.75, made a 4549.25 double bottom at 10:00, rallied up to 4557.50 at 10:29, and ripped up to 4566.75 at 10:43 after this headline hit the tape: “FED'S WALLER: IF INFLATION CONSISTENTLY DECLINES "NO REASON" TO INSIST RATES REMAIN "REALLY HIGH.” 

After that, the ES down-ticked, traded up to 4577.25 at 11:47 and then another Fed headline came out saying, “FED'S BOWMAN: BASELINE OUTLOOK IS THAT US CENTRAL BANK WILL NEED TO INCREASE INTEREST RATES FURTHER TO KEEP POLICY SUFFICIENTLY RESTRICTIVE.” 

From there, the ES sold off down to 4551.75 at 1:02. After the drop, the ES back-and-filled around the VWAP, rallied up to 4563.75 at 3:02 and then sold off down to 4554.00 at 3:24 as the early imbalance showed $103 million to sell. The ES rallied back up to the 4552.25 level at 3:49 and traded and 4564.50 as the 3:50 cash imbalance showed $3.4 billion to buy, traded 4563.75 on the 4:00 cash close and settled at 4564, up 2 points or 0.04% on the day.

In the end, I knew the risk of saying sell the rallies when the ES was down on Globex, and today that meant a lot of low-volume chop. This is what I posted in the MrTopStep chat near the lows of the day. 

  • IMPRO: Dboy :(10:15:59 AM): 7 ES buy imbalances, 1.3k ES bought

  • IMPRO: Dboy :(10:16:28 AM): ES still holding in the back and fill pattern, check it out the ES 5 points off the low of the day. 

In terms of the ES's overall tone, it was all about buying weakness. In terms of the ES's overall trade, volume was a little better: 203k traded on Globex and 1.176 million traded on the day session for a total of 1.379 million contracts traded. 

Technical Edge

  • NYSE Breadth: 60% Upside Volume 

  • Nasdaq Breadth: 61% Upside Volume 

  • Advance/Decline: 50% Advance 

  • VIX: ~12.50 

S&P 500 — ES Futures

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Guest Post

PTG / Taylor 3-Day Cycle

Author: David D Dube’ (a.k.a. PTGDavid)

Prior Session was Cycle Day 2 (CD2): Two-way traffic consolidation continued within prior DTS 11.28.23 outlined parameters of 4555 - 4575 edges. Prior range was 30 handles on 1.382M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): Three-Day Cycle Statistic will be fulfilled as long as price trades above CD1 Low (4552). This cycle continues to have upside potential  targeting 4593 handle. As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4565, initially targets 4590 – 4595 zone. 

Bear Scenario: Price sustains an offer below 4565, initially targets 4540 – 4535 zone.

PVA High Edge = 4565       PVA Low Edge = 4554         Prior POC = 4564

*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.

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 3 (CD3)

Thanks for reading,


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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!

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