ES review & plan
Shorts were squeezed yesterday, back above the prior three day's highs. The range between 2102.75-07.50 has a prominent POC/VPOC at 04.75/05.00, which is pivotal. A break and failure under the range could see liquidation through to 2100 initally (June contract). Above the range a poor high has been left and the next upside level is last Wednesday's VPOC at 2112.50.
It is rollover today, but until the volume moves across to September I'll stick with June's charts. There is a 7.25 point discount for September.
Overnight has been quiet within yesterday's upper balance area The range is currently 2103.25-2107.50. Jobless Claims, Retail Sales and Import/Export Prices are due at 7.30am ct and Business Inventories at 9.00am ct.
Adjusted zones for today are below. The most probable scenario I see today is for continuation above yesterday's poor high to the 2112.50 VPOC of the range and next low volume area on the composite profile at 2115.00-16.75. The next scenario I see would be for some back and fill of the air pockets left yesterday for continuation higher and I think the least probable is for a complete reversal of yesterday's gains.
ES review & plan
Following the open, there was a push higher towards the overnight high but this was rejected and sellers dominated to take out the prior day's low but did not make it as far as the overnight low. We saw two-sided trade as buyers pushed prices back above the overnight high only for sellers to step in at the prior VPOC and push back to the other side of value.
Volume continues to be low in the cash market at 3bn shares on NYSE. Volume will be less reliable in the contract after tomorrow with rollover.
Overnight so far has seen a move higher. The range is currently 2080.00-2089.00 versus settlement at 2080.00, squeezing shorts from yesterday. The bull/bear zone overhead at 90.25-93.75 is now resistance and appears to be the next target for longs. Above 93.75 we could see longs attempt to dominate as more shorts are forced to cover. In the absence of economic data and news flow I don't have any major bias and am using the zones below for fades/target areas with order flow.
ES review & plan
Yesterday saw a rejection of prior value and a move lower on light volume (1.2m contracts & just 2.9bn shares on NYSE). The lack of volume suggests this is short time frame traders dominating still.
The market is now challenging the low of the range formed since May 7th at 2057.00. Overnight has continued the downtrend with a range currently of 2068.75-2082.75 versus settlement at 2078.25. The is an HVN at 2074.00 on the composite volume profile which may act as an area to balance around, and I'll be using the zones for areas to fade together with order flow. Gap rules are likely to be in play with yesterday's low at 2076.25.
ES review & plan
Following the stronger than expected NFP on Friday, there was a move through the weak low of the prior day overnight. After the bell the market drove through the overnight low but had no follow through and found responsive buyers which pushed back into the prior range. The session ended extremely balanced with 2092.25 being the prominent POC.
There are no major economic announcements due today and overnight trade has been slow so far with a range of 2086.50-2093.25.
The bull/bear zone for today is 2091.00-2094.00. Holding below 2091 could see a re-test of Friday's low and the zones highlighted below potentially. A hold above 2094.00 could see the upper zones targeted as highlighted.
ES review & plan
We saw a pick up in futures volume yesterday as a push lower forced weak longs to liquidate. However, underlying share volume was still low at 3.2bn on NYSE. Ahead of today's employment report there was an 8 point rally from the low into the close back into the range, leaving no excess on the lows.
Overnight the range is currently 2096.50-2102.75 versus settlement at 2099.00, and is a high volume area on the composite profile. We could see many scenarios playing out today depending on the news at 7.30ct. The chart below shows potential reactions I see on particularly strong or weak data, otherwise we are likely to see false breaks and return to value on in-line numbers.
ES review & plan
Yesterday opened and attempted to take out the overnight low (also prior day's settle), but failed. The destination was then the overnight high which was hit in the morning but failed to hold above. The session was balanced within range and volume was 1.3m contracts and just 3.1bn shares on NYSE.
The equity markets have been ignoring the rout in the bond markets so far, but for how long?
The balance of the past 7 days trade will eventually lead to an imbalanced move, and with NFP and Greek headline risk, there could be some energy behind it. The all-time high remains untested in regular trading hours which has a high probability of happening, but the market may need to break from current balance to find cheaper buyers before that.
Overnight so far the range is 2099.75-2116.50 versus settlement at 2116.00, so the market is looking extremely short going into the open currently (opposite of yesterday). Jobless Claims & Productivity and Costs are at 7.30ct. The odds of seeing a move away from the current range ahead of tomorrow are probably slim, so I'm using the support/resistance zones for fade moves.
Most of the overnight volume is below yesterday's low and shorts look trapped above the 2105.75 overnight pullback level. If longs push back through yesterday's overnight low (2106.75) and hold above yesterday's RTH low (2107.25), we may see some forcing action to drive back through yesterday's range potentially.
ES review & plan
The market remains in a range for the past 6 trading days and volume was noticeably lower in the underlying cash market yesterday at just 3bn shares on NYSE, and with 1.4m ES contracts trading. The high left yesterday was poor and appeared to have been formed as day time frame inventory got too long and corrected.
The market overnight has ranged between 2106.75-2119.75 versus settlement at 2106.75. The ECB press conference is at 7.30ct at the same as the US Intl. Trade Balance is released.
The key support/resistance zones are highlighted below. Given the aggressive overnight rally my expectation is we are likely to either see an inventory correction, or a continued rally as shorts are forced to cover a break from balance.
ES review & plan
Value overlapped the prior day and the POC/VPOC were higher despite the lower low and high relative to Friday. The early low broke through the poor low from Friday and found buyers, then rallied to eventually break through the overnight high in the afternoon before finding sellers to finish approximately mid-range.
The composite volume profile shows the magnetic pull of the high volume 2098.00-2094.00 area. A break through the near term support/resistance areas gives higher odds of a directional move today or else the market may likely remain in balance.
Initial Support: 2095.25-97.25
Initial Resistance: 2109.25-12.75
Overnight the range is currently 2094.00-2112.75 versus settlement at 2109.25.
ES review & plan
Volume picked up slightly for the last trading day of the month with 1.6m ES contracts trading and 3.9bn shares on NYSE. After the open there was a small move higher which was rejected just under the prior day's VPOC and the market drove lower.
The breakout above the high made in February at 2117.75 has failed so far, though the current all time high remains untested in regular trading hours, which has a high probability of happening. There are also limited signs of the long term upside auction being completed in terms of volume and excess. The pullback from the all time high at 2134.00 found support at the composite high volume area 2097.75-2101.75. If this area is re-tested and fails there would likely be some heavier liquidation moves lower. Longs are in the driving seat currently, however, and I'm using the zones below for potential targets/trade locations. Headline risk is high with Greece and has already had some impact on the EURUSD and ES.
The overnight range is currently 2104.00-2115.75 versus settlement at 2106.00
Economic Calendar for today:
ES review & plan
Yesterday's turnaround tested the prior day's POC and reversed quickly to drive higher and force shorts to cover. The gap from Friday's low was closed and the profile was left with several anomalies between 2113-2119.25 to revisit. Volume was low at 1.2m contracts and 3.1bn shares on NYSE.
A look at the volume profile shows the rally back from just below the 161.8% breakout back to the micro composite VPOC at 2124.25 (yesterday's high), after launching from support at the composite VPOC at 2101.75. It remains to be seen today if the market is going to accept back inside that value area (2019.75-29.75) or reject it and re-test the recent lows.
Overnight the range is currently 2115.25-2121.75 versus settlement at 2121.00. Last week's low at 2112.25 is a line in the sand for bull/bears. Jobless Claims and Pending Home Sales are due, plus Kocherlakota is speaking on monetary policy.