The Market Needs a Rest
The NQ enjoyed its 7th straight daily gain
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After a morning rip and selloff, all three major indices — the Dow, S&P and Nasdaq —- closed modestly higher. Small caps closed the day lower, with the Russell falling more than 1%.
The NQ closed higher for the 7th day in a row, its longest winning streak since January. Maybe the markets go up today, but I have a feeling we could see a down day and possibly a few more. Even if traders are bullish, some rest makes sense after last week’s move.
I think there is a lot of resistance between 4390 and 4420. This rally is short-term over-extended and overbought.
Our Lean — Danny’s Trade
MiM and Daily Recap
The ES traded down to 4374.00 on Globex and opened Monday's regular session at 4382.50. After the open, the ES traded up to 4389.50 at 9:33, sold off down to 4375.00 at 10:16, rallied up to a lower high at 4386.75 at 10:43, and then sold off down to 4364.25, before printing a new low at 1:20. I want to point out that today's trade is one of the quietest in a long time and despite a few small early rallies, it was a low-volume grind lower.
After the low, the ES bounced up to 4373.25 at 1:47 and then sold off down to a higher low by 1 tick at 4364.50, rallied up to 4373.25, traded down to 4364.50 and rallied up to 4378.25 at 2:47 when I was long 6 ES and 2 NQ:
IMPRO: Dboy :(2:27:30 PM) : flat NQ at 66.00
IMPRO: Dboy :(2:28:24 PM) : long 6 ES
IMPRO: Dboy :(2:28:39 PM) : now that I bailed on the NQ, the ES will fly
As soon as I got out of the NQ, the ES rallied up to 4379.50 at 3:03, 4379.75 at 3:11 and 4380.50 at 3:14 as the early imbalance showed $614 million to buy. From there, it chopped in a 5 to 7-point range until 3:49. The ES traded 4377.00 as the 3:50 cash imbalance showed $1.348 billion to buy and traded 4384.50 on the 4:00 cash close. After 4:00, the ES rallied up to 4385.50 and settled at 4380.25 on the 5:00 futures close, up 1.75 points or 0.04%.
In the end, it was a quiet day. In terms of the ES's overall tone, it acted tired. In terms of the ES's overall trade, volume was low: 205k traded on Globex and 1.1 traded on the day session for a total of 1.305 million contracts traded. It was the lowest volume session since Sept. 18.
NYSE Breadth: 26% Upside Volume
Nasdaq Breadth: 32% Upside Volume
Advance/Decline: 28% Advance
Last week: Back-to-back 80/80 days for A/D and NYSE Breadth
S&P 500 — ES Futures