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- Negative Headlines Continue to Pile Up
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Our View
The idea that things are simply going to get better soon is far-fetched. Between Bloomberg, the Wall Street Journal and CNBC, I counted over 30 different headlines and only a few of them were good. Some include:
Putin saying he is moving tactical nuclear weapons to Belarus
Crude oil rallying almost $7 dollars from Friday’s low
Israeli Prime Minister Benjamin Netanyahu suspending his judicial overhaul plan
Large-scale transport strike brought large parts of Germany to a standstill
JPMorgan saying the decline in commercial real estate is intensifying
Bitcoin falling under $27,000 after the CFTC charged Binance for violating trading rules
There are so many headlines it's almost impossible to keep up. It's almost like we are just waiting for the next bad headline to hit and this is the reason that being overly bullish is a risky trading strategy.
If I know one thing for sure, you don't buy into the ES after it rips and you don’t sell into declines after a big fall.
Our Lean
The VIX closed at $20.60 and to me that spells complacency. Yesterday was all about “thin to win” and as the week rolls on and with quarter-end on tap, I think both — complacency and “thin to win” — are setting up to change.
Yesterday we only provided one level, which was to buy the dip into the 4000 to 4010 range and “particularly the bottom of it.” That worked well, as the ES bottomed at 4000.25. For today though, I want to look at the levels on both sides — up and down.
Our Lean:
This is Danny Riley’s personal trading plan for the day. To get this delivered daily, please consider upgrading to a paid membership.
MiM and Daily Recap
The ES traded up to 4033.75 on Globex and opened Monday's regular session at 4026. After the open, the ES traded up to 4031.50 and then dropped 4019.50 at 9:35. The ES rallied up to a new high at 4034.25 and then dropped down to a new low at 4006.75 at 10:45, rallied up to the 4015 area and pulled back down to 4002.75. It then rallied up to another lower high at 4013.50 and then traded down to a new low at 4000.25 at 11:55, the low of the day.
The ES rallied back up to 4014.25 and the bond auction results hit the tape. The ES sold back off down to 4005, climbed up to 4020.50 at 1:49, and sold off down to 4009.75 after a headline hit saying that the FDIC chairman said the banking system is sound but there is still significant downside risk. After the drop, the ES rallied back 4027.75 at 3:05 traded ~4013 as the 3:50 cash imbalance showed $1.34 billion to sell.
The ES traded 4010 on the 4:00 cash close and after 4:00 the ES bounced, settling at 4015 on the 5:00 futures close, up 6 points or 0.15% on the day. In the end, the ES traded in a 34 point range and closed on the lower end. In terms of the ES’s overall tone, it was firm but not overly. In terms of the ES’s overall trade, volume was on light at 1.25 million contracts traded.
Technical Edge —
NYSE Breadth: 76% Upside Volume
Advance/Decline: 75% Advance
VIX: ~$20.75
Individual Stocks to come in an individual email.
SPY
Key Pivot: $395.50
Upside Levels (SPY): $399, $399.75 to $400.50, $402.50, $404.
Downside Levels (SPY): $396, $394.50, $392, $389.50
S&P 500 — ES…
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Open Positions
FSLR down to a runners.
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