We keep our long and short strategies ready to trade this market. I want to be positioned for a parabolic move higher or a big correction lower if it happens. This market has been congested lately and we are looking for resolution, possibly tomorrow.
In the stock index futures, the first half of the day looked more like an FOMC Day pattern. The selling at the open the last two days is notable and a point of interest. The Nasdaq futures sold off 275 points in 7 minutes between 9:32 am EST and 9:39 am EST. There were three waves of selling before the dip buyers drove up prices again. This is two days in a row we saw strong selling at the open.
The consensus seems to believe the market will melt up into the end of the year as that tends to be the seasonal pattern. The last two days of strong selling at the open bring that into question a bit, from my perspective. I remember the end of 2018 when the Fed tried to normalize interest rates and how the market sold off before the plunge protection team came in at the end of December. If the market "tanks" into year end, it would happen for a different reason and one for which we would know after the fact.
Coffee and Natural Gas had some nice long trades. Coffee is approaching 300 and the bullish trend in Cocoa has re-emerged.
The One Million MNS 105 was down -0.15% on the day and the 250K Portfolio was down -$300.
The hypothetical results for the Stock Index Portfolio 18 were +1,050 per E-mini and +$68 per Micro for a positive day.
Tomorrow is Friday and we will see if there is a resolution to the weeklong congestion. All four days so far, in the Nasdaq futures have tested the 20,500 level from very high levels. The market made a high today within the first 3 minutes just above 20,900 before making a low of 20,514.25 intra-day. Monday, Tuesday, and Thursday, the Nasdaq 100 futures tested 20,500 and remained just above that level during the day session. On Wednesday, it traded around 20 points below 20,500 before a big rebound higher.
One scenario is a test back to 20,750 before rallying to new highs before the weekend. I'm not predicting it but it's one path to consider. If the bearish selling comes out again at the open tomorrow and persists throughout the day, they could be determined to close it below 20,500 and then work to test 20,000 next week. Its also possible that the market could test and take out 20,500 and 20,000 in one day. If it can move 275 points in 7 minutes, 800 points is within a day's reach.
We keep our long and short strategies ready to trade this market. I want to be positioned for a parabolic move higher or a big correction lower if it happens.
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