ES review & plan
The market broke through the weak low left from Monday and Tuesday and pushed into last Friday's range. There is still a weak low looking vulnerable at 2097.00 and a naked VPOC underneath at 2091.50. Yesterday's overnight low at 2108.50 is a bull/bear level for me today.
Overnight the range is currently 2101.00-2112.75 versus settlement at 2099.50. Jobless Claims and Personal Income and Outlays are the main numbers due today at 7.30am ct. More conflicting headlines have caused volatility overnight and continue to dominate algo driven moves.
The zone chart also has a micro composite volume profile of the past week which shows that the majority of volume has traded between 2113.00-2116.50. The 2108.50-09.75 zone is my bull/bear for today.
ES review & plan
Yesterday was an uneventful, very low volume balanced day, dominated by day traders. The low that has been left is weak and a push into last Friday's range looks likely during RTH. Just 835k contracts traded and 3bn shares on NYSE.
The overnight range broke lower on news the Greece's creditors rejected their latest proposal. Currently 2108.25- 2118.50 versus settlement at 2116.50. GDP data is due at 7.30am ct.
Zones for today below and expecting a test lower if the 16.50-18.50 area is rejected.
ES review & plan
Monday's open gapped higher following the slow and steady sell-off on Friday's quad witching. Thursday's high became the target after initially failing to fill the range gap and once stops had been filled above there and buying interest dried up, the market slowly moved down through the day's range to fill the gap at the close of play. Volume was very low at just 1m contracts and 3bn shares on NYSE.
Value has shifted higher once more and there is some optimism of a relatively positive outcome for the Greek situation. However, the low volume doesn't show great confidence by the market. The contract high at 2126.50 was made during the globex session, with 2125.00 being the RTH high. It's a very low odds scenario that this will not be tested in the regular trading hours. Yesterday's prominent POC/VPOC at 15.25/14.75 will be an area for longs to defend.
Overnight the range is currently 2114.25-2120.50 versus settlement at 2112.75. Durable Goods Orders are due at 7.30am ct and New Home Sales at 9am ct.
Primary expectation for today is continuation higher, though if we see acceptance below yesterday's POC we could target the lower zones as shown below with expected reactions.
ES review & plan
Friday was a slow and heavy trade, with the market rotating around the overnight low for the first couple of hours until finally bears took control and had an aggressive push into the close towards 2100.00, which may have been related to the option expiry.
Globex trade opened with a gap higher and a push up to the 16.75-19.50 zone once more. It is unlikely we are going to see much longer time frame activity until there is something solid coming from today's EU crisis talks. So far the feedback is not good from the Eurogroup meeting this morning but markets have not reacted negatively yet. Headline risk is obviously huge today, so playing things very cautiously and short term around levels.
ES review & plan
Yesterday saw a strong open and push through the overnight/prior day high to squeeze shorts aggressively leaving a prominent POC/VPOC at 2113.50/25. The pullback low at 2110.00 is an important line in the sand going into today as there are lots of single prints and potential for filling in of the low volume area below. The market is, however, imbalanced higher in the short term, with value having steadily risen for the past few days, so continuation is expected with a hold above 2110.00. Quad witching expiry today may see games at the open (futures & futures options) and close (for stock options ). Acceptance above yesterday's value could see an attempt at the all time high, which still looks unfinished.
Overnight the market is holding onto gains, with the range 21110.00-2117.75 (versus settlement at 2114.75) attempting to fill a low volume area on the composite volume profile. Expected moves and reactions are marked based on how the market behaves at the current 2116.75-19.50 zone. Failure up here has potential to push back into the 2086-97 high volume area, with 2088.00 being the HVN. The path of least resistance in the short term though looks to the upside assuming the 2110.00 level holds.
ES review & plan
We saw value push higher in the wake of the FOMC statement, but the highs were quite aggressively sold off into the close, back towards the prominent point of control.
Overnight the market has stayed within yesterday's range and has traded between 2082.00-2096.50 versus settlement at 2089.25. CPI is due at 7.30am ct, which could set the tone for the day if much different to consensus.
Updated zones and expected reactions below.
ES review & plan
Yesterday saw a brief move down to the 2072 breakout level from Monday, and this was quickly rejected. The vast majority of time was above the overnight high and after a balanced first hour and a half, the trend moved higher to close the gap and move through the value area of last Friday, building most volume at the upper range.
The overnight market has continued higher forming a range between 2088.75-2096.50 versus settlement at 2089.00. The much anticipated FOMC statement is due at 1pm ct, with a press statement at 1.30pm ct.
A look at the 4hr globex chart shows the current range from the swing low on May 7th to date with a custom micro-composite volume profile (left) and the composite volume profile (right), together with zones of interest. The market has clearly moved back into the high volume area ahead of today's announcement.
A zoom in on the 60 min chart gives a clearer view of the zones, HVNs, LVNs and anticipated reaction off the zones. The purple line is the micro-composite volume point of control (mcVPOC) from the current range. I'm totally neutral going into today and expect to see balanced activity ahead of the statement.
ES review & plan
The open was below the prominent VPOC/POC from June 9th and rejected it quickly on the inital tick up after the bell. There was then a drive to test the low of that day, which was a one-tick move below and then came back into range as strong positive cumulative delta divergence was evident (see below). Shorts were forced out above the initial balance high and a P shaped profile was formed, normally associated with short covering action.
Overnight so far the range has been 2062.00-75.75 versus settlement at 2075.50 with inventory is net short. Housing Starts are at 7.30am ct and headlines continue to be dominated by the Greek endgame. The FOMC statement is tomorrow, CPI Thursday and quad witching on Friday so important not to get married to a view on the market as we could see wild swings either way.
I'm using the zones as potential engagement/target areas depending on context (sentiment, auction process, order flow etc.). The 61.50-63.25 zone has been tested a few times now during globex which increases the odds of it failing on a test again. This could see a flush down to the 53.50-55.50 zone. Above the overnight high, shorts could receive continued pressure and an attempt by longs to close the regular trading hours gap above, and see a push to the 81.50-83.50 zone. Ahead of tomorrows announcement we may just see two-sided trade.
ES review & plan
Friday saw a gap lower and attempt to fill in the weak structure left from Wednesday's rally. Most of the trade was under the overnight low and trade was heavy with a poor low being left on the day. There still remains an open gap and naked VPOC/POC from last Tuesday underneath for regular trading hours.
Overnight so far the market has moved lower, as European indices have fallen around 1% with the Greece endgame in sight. The other fear by the market apart from Greece defaulting is the knock-on effect to the likes of Portugal,Spain and Italy, whose bond yield spreads have been widening over bunds.
The current range is 2072.00-2081.50 versus settlement at 2085.00. It's an important week for data starting today with Empire State Manufacturing, Industrial Production and Housing Market Index. The main event is the FOMC announcement on Wednesday - an unexpected rate rise this early could see some carnage in the bond and equity markets. CPI is due on Thursday. Full US calendar here.
For today I'm using the zones below as areas of potential action/reaction. Sentiment is weak and overnight inventory short, so will be looking for clues in order flow of either a correction to inventory and then continuation lower or just continuation lower as being the two most likely scenarios I see. Thirdly, we could see a correction of shorts and continuation higher forcing more aggressive short covering action, into the gap above Friday and towards Thursday's naked VPOC.
ES review & plan
A very balanced day on the first day of rollover. The charts and zones below are now adjusted to September. I'm not trading today but will be back with a full write up on Monday.