Low-Volume, Low-Volatility Trading Persists

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Our View

This week is all about the Nvidia earnings report, which comes out after the close on Wednesday. 

Despite the lethargic, low-volume trading environment, expectations are set for a jump in volatility. I pulled this story out of Reuters just after 1:00 am titled, “Nvidia earnings could spark $200 billion swing in shares, options show.” 

Remember, this is now a $2.3 trillion company. 

Also, Memorial Day weekend is coming up. Here’s the trading schedule surrounding the holiday. 

MiM and Daily Recap

The ES traded up to 5337.75 on Globex and opened at 5328.00. After the open, the ES traded 5326.75 at 9:31 and then rallied 18.25 points up to 5345.00 at 10:01, pulled back to 5339.50, traded up to 5346.25 at 10:25, pulled back to 5342.75 at 10:07, rallied back up to 5346.00, traded back down to 5343.00 at 10:41 and then rallied up to 5348.50 at 11:40. After the high, the ES sold off down to 5334.50 after Jamie Dimon said “To make it really clear: We're not going to buy back a lot of stock at these prices,” Dimon told attendees at the bank's annual Investors' Day.

"We do not consider stock buybacks returning cash to shareholders. That’s giving cash to existing shareholders, we want to help existing shareholders,” Dimon said, later hinting that he is preparing to retire. The ES rallied back up to 5337.75 at 1:45, then fell another 14 points down to 5323.75, rallied up to 5327.75, made a higher low at 5324.75, and then rallied up to 5336.75 at 2:47. 

From there, it traded back down to 5329.75 at 3:08, rallied back up to 5336.25 at 3:20, traded down to 5330.75 at 3:39 and traded 5328.50 as the 3:50 cash imbalance showed $134 million to sell, traded 5327.50 and climbed to 5334.25 on the 4:00 cash close. After 4:00, the ES rallied back up to 5335.75 and settled at 5331.75, up 4.5 points or +0.08%, the NQ settled at 18,763, up 127.75 points or +0.69% and the YM closed unchanged.   

In the end, the ES rallied right out of the gate but lost their bid after the Jamie Dimon headlines. In terms of the ES's overall trade, volume was low: 130k traded on Globex and 896k traded on the day session for a total of 1.025 million contracts traded.

Technical Edge

• NYSE Breadth: 49% Upside Volume

• Nasdaq Breadth: 73% Upside Volume 

• Advance/Decline: 49% Advance

• VIX: ~12.50

Guest Post — Niels from Tradrr

Short and Sweet for the week. FOMC minutes to be held Wednesday afternoon therein the comments given could aid in defining a move either away from balance or back towards it with a move above and past Zone 1 or we leave the trade above as a failed breakout and begin to travel back down to the POC within Zone 3 keeping Zone 2 as a line in the sand against that scenario should it hold once more.

For more from Tradrr, please visit this link. 

Economic Calendar

More Fed speak overload

For a more complete Economic Calendar see: https://mrtopstep.com/economic-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!