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@DT So expecting a slow day. Weekly wise there's not much to go off. First order of the day is a break of yesterdays pit session range and... <
Given that the open outcry is now much less than 20% of regular trading hours trades, would it be better to not use the confusing 'pit session' phrase? Throws me everytime. 'RTH' may be better - shorter too.
We are all techno-geeks here, right? No need to party with the outmoded, uncivilized floor guys. Well past the time to move on.
We've been to the top of the range and back under 1970, so now to see if sellers can take the reigns and push us to 1959.85 and then to 1947.50.
It looks thick down to 1966, after which, I expect some acceleration. Not much else to say about the weeks profile, it's pretty well distributed.
On yesterdays Globex low was 1967, close to our 1966 level and so I'll be watching that general area to see if sellers step in on a break. To the upside, it's the highs again, so any bounce off this level should take us for a test of 78. So not many scenarios today - we could chop about but a break of 1966-67 will be interesting from a short perspective and a hold there would be interesting in terms of a potential run to the top.
Weekly Numbers
Range - 1958.75 -> 1978
Value 1967.25 -> 1974.25
S1 1947.25, R1 1976.50
Daily Numbers
Range - 1967 (globex) / 1969.25 (pit)-> 1978
Value - 1971.75 -> 1975.75
Globex - 1968.25 -> 1975
If we go back to the 14th, we were expecting this:
And here we are right now:
So we retested the highs, rolled and got back quite a way though our 47.50 level.
Now, because that has been completed and apparently rejected, we could be on our way back to the highs. But the dip down and rejection has been in the Globex session. Yesterdays pit session low was 1949. So I think today we have to see what happens around 47.50 at the pit open. We could potentially carry on down to complete the larger range.
We are now the main distribution for this week. 1963 and above sees us moving through that area. If 1963 holds, that will be pretty bearish. We also have a single print at 58.50 - which is just below our 59.75 level. So I'll be watching that first, then 1963 if we do pop up off the open.
Todays Globex session is mostly short - it's only 5:30 AM EST here, so that could recover. If we stay below yesterdays settlement of 1953.50 into the open, there could be an initial re-balance up.
Downside - if we break 47.50 again, I'm looking for 1937 and then 1917.25
Weekly Numbers
Range - 1942.50 -> 1978
Value 1963.75 -> 1974.50
S1 1947.25, R1 1976.50
Daily Numbers
Range - 1949 -> 1976
Value - 1960.50 -> 1974
Globex - 1942.50 -> 1956
We had a couple of large range days on Thursday and Friday. Volume 2.4 million on Thursday on the way down and 1.7 million on the way back up on Friday. We can attribute Thursdays sell off to the Malaysian Airlines tragedy. It's pretty common to go on and recover the lost ground the day after a move like that, so Friday isn't really telling us much.
There is no reason to expect similar volatility today in my opinion. We could but I don't see what would drive it. If we consider where we were heading into Thursday, we were at the top of the range and looking to see if we could break the range upside and if we did, if there was any demand up there.
So today, we are looking for signs that the upside move is done and that we are headed back to 47.50 or if we are having another run at the highs.
If we look left, we can see we've spent plenty of time in the mid 60s upwards, so we could be choppy in the process of testing the key levels around here.
We can see the upper distribution from last week is 63.75-> 75.50, so again, within that range, we could experience chop.
On Thursday we pulled back to 65.50 and in the Globex session so far, that has been our low, so I'll be watching that level at the open to see if sellers jump in there. Fridays settlement was 71.50 so right now it looks like we'll be short into the open which gives us the possibility of an initial reaction upwards. If we can get through Fridays high of 74.25, then we might get some acceleration up into the top of the range.
Weekly Numbers
Range - 1942.50 -> 1978
Value 1963.75 -> 1975.25
S1 1954.25, R1 1983.25
Yesterdays expectation was that we'd chop from 63.75-75.50 and we'd likely accelerate below that level. We did get a breakdown to 59.00, 3 ticks below our 59.75 level but e couldn't hold it and couldn't get down as far as Fridays pit session low (1957.25).
Now we are back into the 63.75-75.50 area. You could argue that hitting turning close to the 59.75 level yesterday gives us a good chance of buyers driving it through the highs.
Yesterdays pit high was 1970 and so far the Globex session is within yesterdays range which was within Fridays pit session range.
Going into today I'm neutral. Globex session looks neutral. We are in a range area and I'll be looking for the range to break for a decisive move. Other than that, I'm watching the usual levels yesterdays highs/lows for bounces for smaller trades. So if we move up off the open, bounce off a level, I'll play downside but not expect too much from it. If the range breaks, I'll expect more of a run.
Weekly Numbers
Range - 1942.50 -> 1978
Value 1963.75 -> 1975.25
S1 1954.25, R1 1983.25
Not sure about tone but either way the "pit session" is not what it used to be. There are still valuable clues found there but the relative low volume does change how to view things in my opinion. I focus on the volume regardless of "time", that is to say that I pay attention to activity.
Here is one item to consider though. The guys that are trading from the floors generally, are either the very best super seasoned professionals or they are working directly or indirectly for the best. So how they respond, what they do, the levels they respect are all valuable pieces of information in some regard.
The "screen" on the other hand, while it generates most of the volume, also is the venue for most of the fools set out to get rich quick because they read a book or can code a color change MA.
Safe to say that all things must be considered, viewed for what they are, then retained as valuable or discarded as distraction.
What I pay attention to is the times that the stocks in the S&P500 are trading. So we could call it the "stock session" or "equity session". That's basically when the pit trades - when the NASDAQ day session starts.
As for the relevance of the S&P pit - it's largely irrelevant now. In terms of the guys trading from the floor - there's about 10 of them. Most of the day, they are standing around doing very little.
What they do is mostly take large institutional trades and then lay those off against the mini's. So if an institution wants to hedge with 500 big S&Ps, they'll pay up a few ticks for guaranteed price with a floor trader who will then lay that off against the mini S&P. They are playing for ticks.
The volume going through these guys is irrelevant but basically they are arbritrage traders and if you are looking for a hint of a directional bias, I think it's no longer a good place to look.
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Yesterday was very interesting - we popped through the old high and - nothing. Nobody was there. We popped a few ticks, fell away then took another pop later but there was just no real willing to buy up there.
It is possible we just need to shake out a few longs (i.e. people that need to sell) before we can move any higher.
It is also possible that we will just sink like a stone!
So todays (and probably the next few days) game is to get an idea as to whether we are going to maintain these highs and then push up or if we are set to drop back to 47.50.
We do have a level below us at 1971.75, so that's a line in the sand - we've come down to 72.25 so far. If we test this and buyers step in, then it looks more decisive to the upside.
So today if we move up, looking for signs of a rejection of the high or yesterdays value high. If we open below yesterdays low, then also looking for signs of a rejection of yesterdays low - all things that sellers will often jump on. That gives us decent short opportunities. On a breakout up, looking for a good pullback level to lean on for a continuation.
To the downside, I just really have 71.75 from here and if we can hold below that, I think sellers will step in and take us to 59.75 and then 47.50.
It's all about seeing commitment from one side or the other to me. Any weak, flimsy moves like yesterdays probe up will be ignored and I'll try to jump in on a continuation if I feel one side is giving up.
This may take a few days to play out and so it may be a day to pick off some smaller trades.
Weekly Numbers Range - 1959 -> 1980.50
Value 1963 -> 1975
S1 1954.25, R1 1983.25
everyone can have an opinion based on whatever empirical evidence or whatever cognitive bias they like. We agree that the influence of the floor trader is not what it used to be. As for the pit session being de ninimis, that may be farther that I'd go.
In July, I have 4 trades that have occurred before 7:20 am CST and zero trades that have a time stamp after 10:54 am CST. The wldman session is after all, all that matters. 7:30 am-10:30 am.
