ES review & plan
Volume was good again yesterday at 2.3m contracts and 4.1bn shares on NYSE. The prior day's impulsive move lower did see a slight extension lower but overall the day was balanced and the VPOC/POC higher than Monday's. The day's high fell just short of the 1990.25-1992.75 bull/bear zone I was using yesterday
Overnight has seen a strong rally with a range of 1871.50-1900.25 so far, versus settlement at 1874.50. We are likely to see a short covering P shaped profile with the market opening above yesterday's range and potentially staying above the 1897.25 breakdown level (09/24 low). This could lead to a move up through Monday's single prints (1901.75-1911.75) and potentially to close the settlement gap from Friday. Failure to hold above the 1897.25 level may see a re-test of yesterday's prominent POC at least.
ES review & plan
Yesterday saw a long liquidation break away from balance on above average volume and in an orderly move with very weak internals (net advance/declines, TICK & cumulative delta). The midpoint and initial balance low from yesterday is a bull/bear area for today (1890.25-1892.75)
Overnight has seen a small extension to the downside with the range 1861.00-1886.00 so far, versus settlement at 1872.00. The 78.6% fib retracement of the Aug 24th low to Sep 17th high is at 1862.50.
The move away from balance is close to targeting the composite low volume area at 1855-60, which is where we could see responsive buying step in. A move through that area could test the Aug 26th low at 1842.25.
Today I'm primarily expecting a test of the bull/bear zone at 1890.25-92.75 and a potential extension lower from yesterday. Acceptance above the bull/bear zone still has strong resistance to contend with at the Sep 24th low area.
ES review & plan
Friday opened well above Friday's range leading to some short covering action in the morning. The break below the initial balance low saw continuation lower into Thursday's range, which is where it settled. Buyers did step in after the overnight low was broken.
There were two separate distributions on the day, split by the single prints at 1928.25-30.50, a resistance area going into today.
Volume was around 2m contracts and 3,7bn shares on NYSE, slightly above average.
Overnight has seen weakness in Europe which has pulled the ES lower. The range is currently 1929.75-1902.25 versus settlement at 1919.25. It's a full week of economic data as you can see here.
A look at the Globex chart below shows a custom profile around the area of balance of the past month. Prices are back below the value area low and this is where we either see responsive buying step in below value or more shorts initiating/longs liquidating. The more times an area is revisited, the weaker it gets, so an important area for either side to control going into this week.
ES review & plan
We gapped lower yesterday at the open and continued to auction lower for longer timeframe buyers. A brief dip below 1900 and the 09/04 low saw selling dry up and a reversal back towards the prior day's VPOC, which saw sellers step in again.
Volume was above average at 2.2m contracts and 4bn shares on NYSE.
Overnight has seen a move higher with the range 1912.75-1951.00 versus settlement at 1918.75. GDP came in slightly higher than expected but this had little reaction to the ES.
The main expectation for today is a short covering profile filling the gap above and testing the naked VPOC from 09/21. It remains to be seen whether today's RTH low stays above yesterday's range, which would be bullish. Acceptance back inside that range could see more of a balanced two-sided day.
ES review & plan
Yesterday saw rejection of the gap above and consolidation below prior support and the 1937 December range low. Volume was average at 1.4m ES contracts and a relatively low 3.19bn shares on NYSE. Yesterday's prominent VPOC at 1927.50 may be an important pivot in early trade if it opens within the range.
The daily chart below shows how trade has rotated around the composite HVN at 1928.75. Dominance above or below this level is crucial for longs/shorts in my view. Shorts will be targeting the composite LVN at 1853.75 and longs will want to push up to the 1958.75 composite HVN and above.
Overnight has ranged so far between 1913.00-1936.25 versus settlement at 1928.50. Wednesday's Globex low at 1910.50 is the next reference below. Durable Goods and Jobless Claims are due at 07.30 ct and New Home Sales at 09.00ct.
Expectations for today are either:
1. We open within yesterday's range but sellers continue to dominate and hold below the composite HVN at 1928.75, taking out Wednesday's Globex low at 1910.50 and pushing for the RTH range low from 09/04 at 1899.00.
2. We continue to balance within the past 2 days Globex range finding 2 sided trade.
3. We gap down and drive lower towards 1900 looking for longer time frame buyers.
ES review & plan
Yesterday saw a sharp move away from the balance area of the prior 2 days. The early rally rejected the prior support area from 09/14 and the 1937.00 December low. A b-shaped profile formed below the overnight low which is a sign of long liquidation. Volume was 1.98m contracts and 3.8bn shares traded on NYSE, above average.
Overnight has seen an extension of the move lower, with a range of 1910.50-1941.75 versus settlement at 1932.00. I'm using 1937.00 as a bull/bear level today which represents the low of the range from December. 1928.75 is a major HVN on the composite volume profile and is the next major level either side will want to control above/below.
Expectations for today are either:
1. Open within yesterday's RTH range and attempt to fill the gap above and sellers step in to regain control and push back down to the low of yesterday's value.
2. Open within yesterday's range and fail to take out yesterday's RTH high and sellers dominate pushing for the overnight low.
3. Open above yesterday's RTH range within the gap and there's a short covering rally to test the naked VPOC from Monday before sellers step in
ES review & plan
Yesterday was fairly uneventful and saw consolidation of Friday's move. The gap from Thursday still remains open despite the initial attempt to move higher which brought in sellers at the Globex high. Despite the inside value day, the VPOC shifted lower.
Overnight has seen a move lower, below the important support area shown above. The range is currently 1925.75-1965.00 versus settlement at 1963.00. (Note the 09/10 RTH low above at 1925.00).
The daily Globex chart below shows the composite volume profile and key composite HVN at 1928.75 below the December range low at 1937.00 (back-adjusted).
Expectations for today are either:
1. Adjustment to overnight short inventory initially with an attempt to close the gap from yesterday, which is met by sellers at prior key support and a drive lower through the overnight lows
2. Adjustment top overnight short inventory and a push and hold above key support to test yesterday's VPOC before sellers regain control and balance below yesterday's RTH range.
3. There is little pullback from the overnight sell-off and we see continuation lower searching for longer timeframe buyers to step in.
ES review & plan
After Friday's wide overnight range, the market opened near the low of the range and attempted to push higher back into the gap from Thursday's low. This brought sellers in ahead of closing the gap and the overnight low became the shorts objective. Value was lower than the prior 3 days though the area of support from 09/14 held and prevented further falls. This is an important area for longs to defend or risk a more major sell-off. It was the quarterly expiry so volume levels were high in the futures and underlying stocks.
Overnight the range is 1938.50-1964.25 versus settlement at 1950.50, with a bullish bias in the last hour or so. Housing Starts are due at 9am ct. Expectations for today are possibly:
1. Open within Friday's range and consolidate.
2. Open within Friday's range and attempt to close the gap from Thursday.
3. Reject Friday's high and push lower to re-test the overnight low.
ES review & plan
Yesterday saw high volatility post the FOMC, as expected and a pick up in volume. The move higher stopped short of the upper range in the chart above and brought in sellers at the composite low volume area to drive back down into value. The market now is digesting the prospect of a longer wait for rates to rise on the back of the dovish statement by Yellen. Bonds rallied to regain much of their loss from the beginning of the week.
The market does still remain within the range from December and could still see responsive buying accumulate at the areas of high volume shown above. The main fear for longs is a break underneath that range and a hold below the composite HVN at 1928.75 which would put shorts firmly in control on the higher timeframe, which would put the 1852-57 low volume area as a major target for them (initially).
The RTH profiles below show the areas to fill in today potentially. Overnight has moved into this middle area with the range currently 1953.25-1983.00 versus settlement at 1977.25
My expected moves for today are either (N.B. quad witching today - potentially increased vol at open & close)
1. Attempt to close the range & settlement gap from yesterday (based on current overnight level at 1958), then sellers regain control and try to take out the overnight low to re-test the value area from 09/14 (1938.75-43.75)
2. Try to close the gap from yesterday then sellers push for the overnight lows and find responsive buyers, then two-sided trade within 09/15 range
3. No attempt at closing the gap, sellers in control and hold below overnight low for test of the low of last weeks range potentially.
ES review & plan
Yesterday continued it's short term uptrend and broke through the 1983.75 swing high. The micro bull/bear for today I'm using is 1973.25-74.25, as we could see weak longs liquidate ahead of the FOMC announcement.
Longs have been holding above the composite HVN at 1928.75 and the December low for a while now - a sell off could see 1928.75 act as a magnet and see aggressive selling underneath it towards the 1850-60 area.