ES Review & Prep
Yesterday opened with a gap below the prior RTH range, and the rally attempt to close it failed in the initial resistance zone at 6616.25-22.75 and sold off to close in to the key 6518-24.50 RTH support zone.
Overnight saw a weak attempted rally in the Asian session, followed by a downtrend into the very key ETH support zone at 6483-90.50, which was the low and pullback low from Monday before the 250 point spike. Failure of this zone likely to accelerate the selloff with little in way of support below.
The dollar is bid, Vix is pushing 30, and the Treasury curve is bear steepening pre-market…not conducive to a risk-on day and in my view the reality of the war and its repercussions through the economy are finally hitting home. It has been an orderly downtrend over the past month so far, but that could change dramatically. Historically markets tend to crash from oversold levels (RSI on daily currently 26).
We may see an attempt to close the gap from yesterday after the open, but without materially positive news the most likely scenario looks lower. However, if there’s a reversal into yesterday’s range and value area then we could see fast covering of the overnight short positioning and looking to sell into resistance zones if the upside has weak momentum and volume.
Today’s zones below:
