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- S&P Keeps Dipping on Globex, But Will Buyers Keep Showing Up? (Free)
S&P Keeps Dipping on Globex, But Will Buyers Keep Showing Up? (Free)
The S&P keeps selling off ahead of the open. Tech stumbles again.
Danny Riley
April 20, 2023
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A quick note. My good friend Rich — you may know him as Handelstats — will be holding a webinar on Thursday after the close. For more info, please visit this link.
We have some individual stock plays coming in a separate email, as we look to see how the market shapes up around 9:00 a.m. ET.
Our View
I broke a lot of my own trading rules the last few days and it started with not selling Tuesday’s ES gap-up open. The other mistake was not buying yesterday's open. One of my top trades is to fade the gaps.
So what happened?
I thought I knew and when you think you 'know' in the ES and NQ, you're looking for a blackeye. In yesterday's OP, it called for lower prices and the ES sold off ~30 points on Globex. Another mistake I made — a total rookie mistake at that — was selling simply because I was not long. That’s trading just to trade and should never be done.
And the final mistake and the one I know never works, I increased my size. All that during a day that trended higher all session? I didn't end up down that much, but that's not the point; the point is being on the wrong side and missing the long side.
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 down to 4150.50 on Globex with 195,000 contracts, opened Wednesday's regular session at 4158. After the open, the ES back-and-filled at the VWAP in a 4157.75 to 4163.75 range until 10:14 when the ES traded up to 4181 at 1:07. From 10:00 to 1:15 the ES made 10 higher highs, it was a non-stop buy program. After the high, the ES pulled back to the 4174.50 level and then rallied up to another new high at 4187.50 at 2:01 after the Beige book numbers were reported, and then quickly sold off down to 4187.50 at 3:01.
From there, the ES fell into another back-and-fill pattern from 4180 to 4184.50 level until the NQ started falling and the ES broke down to 4173 and traded 4174.25 as the 3:50 cash imbalance showed $95 million to buy, rallied up to 4179.50 and traded 4179.25 on the 4:00 cash close. After 4:00, the ES traded down to 4172.50 and settled at 4173.50 on the 5:00 futures close, down 6.5 points or -0.16% on the day.
In the end, the ES sold off on Globex and went straight up during the day session. In terms of the ES's overall tone, it was firm. In terms of the ES’s overall trade volume was on the lightside at 1.25 million contracts traded.
It was all about MrTopStep’s three parts to the trading day: 1) What happens on Globex 2) What happens at the 9:30 open and 3) What happens in the last hour.
Technical Edge —
NYSE Breadth: 53% Upside Volume
Advance/Decline: 45% Advance
VIX: ~$16.75
So we’ve got a whiff from NFLX and now a whiff from TSLA. Given the importance that TSLA has played in the recent rally, having a bearish post-earnings response isn’t the best-case scenario for bulls.
We’ll see how it opens. Yesterday we noted some of the bearish divergence we were seeing in tech combined with how strength faded on Tuesday, this group could need some more time.
On the flip side, very notable strength is starting to show up in defensive stocks — as we mentioned last week, MCD, WMT, KO, PEP, PG, XLP — as well as healthcare names — like CAH, ABBV, LLY, ABT, XLV, etc.
S&P 500 — ES
The 10-day ema was strong support yesterday and Wednesday morning’s dip was gobbled up. Look at the last three closes: 4176.75, 4180, 4178.50. Clearly a key zone.
Key Pivot: 4175 to 4180.
Upside Levels: 4200, 4217-25, 4240-45
Downside levels: 4140-4145 + 10-day, 4115, 4095-4100
SPY
To receive access to the SPY, SPX, NQ, QQQ and today’s individual stocks, please consider upgrading to a paid membership.
Open Positions
Bold are the trades with recent updates.
Italics show means the trade is closed.
Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be B/E or better stops.)
** = previous trade setup we are stalking.
FSLR, NVDA, QQQ, AAPL, down to runners. Congrats, all. Great sequence!
AAPL — [premium only]
GE —[premium only]
LMT —[premium only]
AMD — [premium only]
**DIA — [premium only]
Go-To Watchlist
Feel free to build your own trades off these relative strength leaders
Relative strength leaders → Tech remains absolutely the strongest group lately.
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Economic Calendar
