Check out tonight’s special market video analysis

Hey gang, filling in for Rob, he lost his voice. It’s Z here. Let’s take a quick look at markets and see what we’ve got up next for the next day. Markets have been in a bit of a dive over the last couple of sessions and perhaps recovery today. We’ve broken an uptrend formation as you can see on the SPE minis that uptrend broke on the backs of some poorer PMI data from the US some manufacturing data that came out earlier in the week, Monday. It was followed up with some negative headlines on trade yesterday and today we did get some more data, it didn’t come out pleasantly but there were some headlines that came out suggesting that things between the US and China may actually be better than Trump had suggested yesterday morning. Yesterday morning at about 10 a.m. Eastern time we got headlines saying the US and China are looking good and then Trump said “well we may want to do the deal after the election”, and down, down we went 5 10:00 a.m. Eastern Time yesterday. From about the 3120 level on the ES down to the lows that we suffered yesterday 3069.5 the gamma pin in the market allows institutions to stay long and swing traders looking for that next bounce but was today really the day where we got a recovery signaling up, up, and away we go from here. We had some interesting trades today on the SPE minis that I’d like to walk you through today and give you a sense of how we traded the morning and how we traded the close and give you some hints on what we think is gonna happen overnight and into the open of trade tomorrow morning with a couple of tidbits and goodies on what you can do yourself into tomorrow morning. So, I’m going to pull up a chart of the SPE minis on a 5 minute basis and what you can see over here is we did take a nosedive at the beginning of the week that nosedive took us down to lows those lows were about the 3069 and a half a point area and what we saw yesterday afternoon was a grind up, grind up, grind up flatlining overnight a dip down and then we got this big, big pulse up. Now, this pulse up got us into a sideways range ahead of the opening bell today and what we did in our Active Trader Room was some guidelines for what we do as a starter trade for the day our suggestion to our community was very simple. We were looking for a breakout above 3107 for a buy we were looking for a break down below 3100 even for a sell and as you can see on the chart we did move up in the pre market that happened around 4:05 a.m. Eastern Time with some Bloomberg headlines broke suggesting the things between the US and China are getting a little bit better.

That did not carry the market much further beyond 3106-3107. We ended up breaking out and that breakout happened on the 935 am candle we then went into a flag or a consolidation pattern – I fumble the ball a little bit during this area but I staunchly stood by the side of unless this market takes out 3118 we’re not likely going higher. Why is that number so important? Let’s take a little look at what happened the day before when we go to 5:10 a.m. Eastern Time right over here on December the 3rd in the wee hours of the morning the headlines broke and Trump suggested that the deal between the US and China may actually happen after election. So, markets didn’t take that very well and went into a tailspin as we saw when we were waking up yesterday. However, that grind overnight it throughout the day and then overnight did leave us in a positive enough spot to look for a breakout we had a couple of push highers the one at 4:00 a.m. the one over here at 9:35 a.m. and then we flag sideways. Unfortunately into the end of the day, the market that had strong breath 4 – 1 advancers versus decliners on the new york stock exchange for a good chunk of the early morning didn’t last for the entirety of the day. What we saw into the close was people moving and rotating into defensive names like, Pepsi for example. We saw Staples get a bit of a bigger bid and we saw the market price darndest to get above that 3118 market which again was the breakdown point. So, we had a breakdown point right at that same line as you can see over here and that’s the area that the market is now challenged against it’s that battleground. We need to get above that 3118 area in tomorrow’s market just just continuation higher now I did mention I did trade the moves in the market from the beginning of the day and I’d like to take you on that journey and show you what the results were. So, starting at 9:30 a.m. Eastern Time we were ready to short the market getting below 3103 to 3101 and we were ready to buy the market on a rise up to and through 3107. That’s exactly what we did we executed as you can see a buy over here my buys kicked in at around 3109 and a quarter of a point and that carried us up into the flag pattern for the day where I’d extracted about a hundred dollars worth of profit from the market. I then fumbled the ball a little bit – it’s not always perfect and we saw a bit of a sideways move occur in the markets until I decided nope it’s going down we’re not likely going to be able to carry this load into the close and I saw a negative profit for a little while until we got up to that 3119 area and got rejected and as we came into the close and shortly after the cash market closed down, down we went, I closed my short trade which was taken on at thirty-one thirteen point five that was closed at 3108.75 and it extracted from the market a total of all of the moves today $217 dollars and here’s the live cash account that it was traded off of you can actually see over here when I click on this button what the net P&L; of the day was two hundred and seventeen dollars and 20 pennies USD that was a trade on the S&P; E minis for the day and our thought process for Mr. Market overnight is we haven’t gotten a convincing signal that we are to rise it looks rosy but a few things have not actually capitulated that we need to see capitulation on.

Capitulation on gold, for example, breaking down below a key support structure 1477 – that hasn’t happened yet we may simply be in a pause right now in this downtrend on gold after it broke the neckline of a double bottom pattern on a journey back up to 1500. We have not seen capitulation as of yet on the usd/jpy the usd/jpy didn’t break above that 108. 9 marker and stay above. In fact, in the very timeframes we’ve seen the yen gets stronger and break this up trend formation add to that the volatility index for the S&P; 500 which did give us a big scare at that 5:10 am marker yesterday and we saw that big move up and then a big, big selling week if you will. We ended up with a VIX candle yesterday that suggested continuation up. Today we did open up with a little bit of a higher VIX print but throughout the day ground down. We tested a key support structure and bounced right up off of it. Capitulation comes in with the VIX below that 50-day moving average the S&P; would then be clearing the 3118 area and we would suggest to folks that at that time when we’ve got that signal the two days of scare that we’ve seen which have been the two most negative days since October the 8th, start to get overturned. It’s a time to either be in cash wait or short and look for inverse trades overnight which is counterintuitive to the bullish candlestick print that you’ve got on the day. Ideas like SH like PSQ like RWM and we’re gonna be managing those in our live Active Trader Room first thing in the morning tomorrow if we see the market above 3118 into the open and it’s up up and away from there with gold capitulating the USD yen capitulating VIX capitulating it is back up to retest the highs. We know that we have seen a couple of negative days that has not broken the big upthrust that started on October the 3rd but, if you remember back on October the 3rd the reversal was instigated on the heels of bad data that implied Powell was likely gonna take deeper and sooner rate cuts. We did get the rate cut at the end of October and we did see the market rally on an uptrend that is now broken this market has been overdue for a bit of a pullback and that started early this week. Is it finished? We hope to continue the journey with you in the next nightly video you!

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