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Our View
There was a brief discussion in the MrTopStep chat about the pressure/anxiety people are feeling. At least in my life, I can clearly say we have never faced more problems than we have today.
Do I worry? Yes.
Do I get anxious? Yes.
I think part of this goes back to my trips between the US and the UAE and how advanced the US was and how far behind Dubai was — even after it began modernizing the country. The United States has been the envy of the world and the global sheriff, but now everything is so polarized.
Even back then, I was told not to go to certain areas in the UAE…but I went anyway. Only in a few of the smaller emeritus did I get the long looks, you could feel the vibe was totally different — like dangerous.
I could not speak Farsi, but I did understand some words. I guess it's fair to say the US/Middle East relations have always been difficult, but Iran is at the epicenter. Recently, a headline hit saying, “Palestinian data provider says the internet is cut off; Israeli army forces ‘expanding their activity’ in Gaza.”
I guess it won't be long until we see if other actors are going to join the fight. Most of you know I have been warning about the possibility of WWIII and at the current trajectory, the odds have improved. In conclusion, there have been times when Americans were welcomed guests in the Middle East, but that time has come and gone.
Our Lean — Danny’s Trade
This is Danny Riley’s personal trading plan for the day.
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MiM and Daily Recap
ES Recap 15-min
The ES rallied up to 4185.00 on Globex and opened Friday's regular session at 4172.75. After the open, the ES traded 4175.75 and then sold off down to 4154.25 at 10:03, rallied up to a lower high at 4172.50, and then sold off down to a new low at 4149.00 at 10:44. After the low, the ES rallied back up to the VWAP at 4176.25 at 11:18 and then traded all the way down to 4126.50 at 2:07. The ES rallied up to 4142.50 and then sold off down to new lows at 4122.75 going into 3:00.
After the pullback, the ES back-and-filled until 3:31 when it ran up to 4137.50 and dropped down to 4122.25 at 3:41 as the early imbalance showed $638 million to sell. The ES traded 4129.50 as the final 3:50 cash imbalance showed $315 million to sell, traded down to 4126.75 and traded 4138 on the 4:00 cash close. After 4:00, the ES traded up to 4141.50 and settled at 4136.50, down 24 points or -0.58% on the day.
In the end, all I gotta say is “failed rallies and broken hearts.” In terms of the ES's overall tone, it was to “sell every rally, big or small.” In terms of the ES’s overall trade, volume was steady: 328k trade on Globex and 1.8 million on the day session for a total of 2.182 million contracts traded.
Technical Edge
NYSE Breadth: 22% Upside Volume
Nasdaq Breadth: 40% Upside Volume
Advance/Decline: 25% Advance
VIX: ~$20.75
S&P 500 — ES Futures
Worth Noting — From Goldman Sachs’ Briefing
“Gold rises amid Middle East turmoil
Gold has rallied along with other haven assets since Israel was attacked earlier this month, with the price of the precious metal recently rising two standard deviations as geopolitical tensions increased. Market prices indicate a growing probability for higher gold returns (known as right-tail risk), but not to the degree that was seen in the first weeks after Russia invaded Ukraine in 2022, according to Goldman Sachs Research. The latter may be in part because rising real (inflation-adjusted) Treasury yields have been a drag on gold this year (investors don't receive yield from commodities like gold).
Goldman Sachs Research finds that the implied volatility (the market's forecast for price fluctuations) for haven assets has risen alongside equity volatility, but it's still low compared with recent highs when geopolitical or recession concerns were particularly acute. That's especially true for gold, whose volatility reached levels that were 1.8 times higher in March 2022.”
Economic Calendar
