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Brian's Tuesday Recap: Bureaucratic monstrosities, thin to win, and the dream

Brian Shepard

Collective Intelligence!
Global stock markets are higher as printing fever grabs the attention of traders. The U.S. jobs data from Friday is still at the fore of the money movement. Many of the markets that were closed Monday are now leaping the wall of worry to five-year highs. Optimism abounds from Mario Draghi’s comments Tuesday that the ECB would monitor incoming data and be ready to cut rates further if necessary. However, the influential Nigel Lawson, former U.K. finance minister, said Tuesday that Britain should leave the euro. David Cameron’s plan to wrest some power from Brussels has not worked according to Lawson. Mr. Lawson sees the EC as a “bureaucratic monstrosity.” - posted by Stanton Analytics. Tony LaPorta offered: With Israel pushing their weight around in the Middle East, I think Crude could hold a bid. Crude: The double bottom at 94.85 may be all this correction has in it. If so, it represents strength. Unfortunately, the proof is not until June rises above 96.30. The risk market on the downside is 94.80. trade accordingly - posted by Stanton Analytics at (09:36CT).

Roger Volz (05:24CT) Aussie rate cut/ German factory orders don't upset - Syria on back burner. Carley Garner (08:38CT)  Our models are calling for a sell level of 1621ish in the ES. Retail traders were overly bullish stocks and crude. We think this sell-off will be more than a session...too many caught getting complacent with risk trades. Matt Zeman (09:11CT) Gold failed@ 20 day EMA at 1469ish. this now looks like a confirmed failure to the upside and selling rallies back on. I like the idea of getting short on any bounces now today as this failure at 20ema and 62% retracement of down move sets stage for retest of April lows.



Since the mid-November lows, the S&P 500 has gained a remarkable 268 points on the back of faith, hope, and Bernanke/Kuroda charity. But perhaps what is more mind-numbing is that this efficient market has given us more than 50% of those gains on Tuesdays. With 17 up-days in a row, Tuesday is the Monday dip-buyers dream. Since 1/18, absent Tuesdays, the S&P 500 has gone nowhere. And just to be clear... Tuesday's gains dwarf the rest of the week's total gains... Zerohedge. Sam E  that is an amazing stat on the Tuesday thing - sure is Sam, you wonder how long such an anomaly can persist? Albie shared, IMO this is what the large size and algos are searching programming for. Pitbull made a living watching these patterns develop and fade. Indeed he did!

Three explosions heard in Tehran near missile facility' Three explosions were heard in western Tehran on Tuesday, in an area where Iran carries out missile research and storage, BBC Persian reported. It was not immediately clear if there were injuries or damage in the incident. Tuesday's report of explosions came days after Israel allegedly carried out two air strikes in Syria over the weekend, targeting Iranian-supplied Fateh-110 surface-to-surface missiles destined for Hezbollah.

Looking for the Thursday / Friday low the week before the May expiration. Chance quizzed: So, if the market trends up and does not find buyers at an extreme the sellers will in theory come down....to an area where there is volume of transactions. The net flow in those price bands move prices either up or down depending on the dynamic of flow there.... So...according to this ES metric I'm looking at. There is a "value" dynamic for transactions at 1613, 1610.50. A break below 1607 can get downside very fast. +Ve money flow (light) yesterday but this thing has been finding buyers at levels mentioned above. I'm still long while not giving much elasticity.



Don't look at the U.S. economic calendar - not much U.S. economic data coming out next week, thin to win? Maybe I should check with www.mrtopstep.com ;). I have always believed that volume = validity - posted by Tony LaPorta.

Harmonics from Kathy at http://structuraltrading.com  Kathy (08:55CT) ES 1619 zone tgt hit, premkt chart: http://screencast.com/t/KyoAJ2sP7vP  current chart: http://screencast.com/t/5VJMI7pJH0L      Kathy (10:17CT) ES retraced bearish Crab 78.6% ish, this sets up for either ideal ABCD or Butterfly, 1619.5 is the deciding factor for the the probability of which one of these opposing emerging patterns plays out, updated chart http://screencast.com/t/5iuALGMCP

Real Traders webinar - Kathy is part of this event for real traders May 9th 11:00 to 4:00CT http://www.realtraderswebinar.com/mts-live-event/  Going to be a great event - sign up early to reserve your spot.

Today’s S&P 500 trade started with 200k ESM and 1.4k SPM traded on Globex, trading range was 15 1609.25 -1617.00. Monday’s regular trading hours (RTH’s), pit session trading range was 1615.20 – 1609.50 before settling at 1613.40 up 4.9 handles. Overnight Australia, RBA surprise rate cut, firm European earnings and German factory orders. German and French Central Bankers / Finance ministers begin 2 day meeting in Berlin. At (08:26CT) John Monaco posted the NYSE opening imbalance was 80% Buy SIDE ON THE OPEN.

The regular trading hours opening range gapped three handles higher to 1616.00 - 1616.50. Sam E (08:37CT) heads up in advance I have a pile of stuff at 1623.50 a PILE. I will definitely be short if we see that. Top Notch (09:00) I concur with you Sam with your 1623.50 target, mines @ 1623.00, although my pile isn't quite that high. Nasdaq notable laggard as [AAPL] [GOOG] and [MSFT] so far with lower highs. Redliontrader (09:06) opening 15 minutes today was 3 handles total range thus far 4.2, volume @ 6kpm, contracts traded per minute was decent, 255 NYSE NHs, new 52 week highs. [NYSE] Advance/Decline line @ 2.3:1, [RUT] 2:1 and the OEX Put/Call ratio was 1.4:1 [neutral]. (09:11) OEX traders getting bearish now at 1.7:1 [bearish] as the SPM, the SPM, big S&P traded in the pit traded an intraday low of 1612.20 before continuing the grind higher. Richcanlione: (09:13) First time since NFP and FOMC - 30Yr yield back to 3%. Jack Broz posted, regarding the bond 3%: if they can take trade 146.04A we'll consider it "taken out" and will look for it to pressure 145.30.The SPM continued to step high throughout the mid-day, low volume grind higher. More and more traders are leaning toward the equities being near term overextended which means the short term stop -o- meter is loading up to the down side as we head into the Thursday or Friday high before next weeks expiration. The run from February 25 (1481.75) to April 11 (1593) was 111.25 handles. We pulled back 62.25 handles to April 18 (1530.75) and up, up and away since.

iceChat (11:58) ES is approaching a number of resistance points offered by several contributors 1621 - 1624 area. Posted by PivotBoss (08:40:32): My key target for the day is 1621.25 for ES. Carley Garner (08:38) Our models are calling for a sell level of 1621ish in the ES. Sam E (08:37) heads up in advance I have a pile of stuff (fibs) at es 1623.50 a PILE. I will definitely be short if we see that. Top Notch (09:00) I concur with you Sam with your 1623.50 target, mines @ 1623.00, although my pile isn't quite that high. mts2 (12:01) sorry if i missed your post ;). William Blount (12:05) COMMENTARY APR 29 --we accelerate through the 1592.5 current high.Add 1589, 1601-1603.5 a tight band due to a cash band BOOK ENDED by two fibbos at 1605 and 1608.5 (there is a very large one at 1607+ in between on cash as well) therefore it can not be pinpointed to a singular price.Above there go with 1609, 1613, 1617.5 1623, and another way up at 1632.5... By 12:50 the SPM printed an intraday high at 1621.60, up >8 handles while the Nasdaq was up only 5 handles. Redliontrader (12:52) bearish tick divergence, as volume slowed to 2.2KPM, NYSE 2.36:1, OEX Dive bells ringing -1.08:1. Redliontrader (12:55) ticks still diverging. By 1:40 the SPM faded back to 1619.50 before grinding sideways to higher. The 1621 area was trading when the closing imbalance showed a small $140M to the buy side. Redliontrader (14:52)

459 NHs. The SPM future traded 1621.30 area on the cash close before settling at 1620.60, up 7.2 handles - just over 10 handles off the intraday low.

Brian Shepard is a 20-year exchange member of the CME Group.


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