ES review & plan
Yesterday saw another attempt to push into the daily range shown above and was rejected. Volume was 1.5m contracts and 3.3bn shares on NYSE, lower than we've seen in the past week (apart from Monday's bank holiday volume).
The past few days has formed a balanced distribution and following the rejection at 2014, the destination became the other side of the micro range. Overnight has moved slightly lower into a composite LVN where we may see responsive buyers step in or a slide back to the top of value of the range towards the 2060 composite HVN.
The market profile shows in more detail how value pushed into the spike from last Friday. The bottom of this spike is at 1989.50, which is where the breakout occurred.
The overnight range is currently 1989.25-1996.50 versus settlement at 1994.00, testing the spike base. If we hold below this overnight low, I'm looking for the naked VPOC at 1982.50 as the next target, with potential to see a more aggressive liquidation break to the 10/07 poor low at 1967.50 and open gap between 1943.75-55.25.
A move back above yesterday's VPOC puts the shorts in trouble and could see a covering rally.
ES review & plan
Yesterday ended up trading on very low volume within the prior day as traders disappeared on the bank holiday. Just under 800k ES contracts traded and just 2.8bn shares on NYSE, and no change to the overall structure and expectations as per yesterday's note.
Overnight briefly tested higher on opening of Globex and has declined since to test the current 2 day range low. The range is 2014.00-1996.75 currently and cumulative delta has been quite negative after failing to push through the current range high at 2014. Rejection of the top of the range could lead to shorts pressing down into the spike from Thursday and nVPOC. If shorts are squeezed after the open we may see the 2020 targeted before responsive sellers are active.
ES review & plan
Friday's range contracted from the prior few days after the huge rally off the 09/29 lows. The underlying market has been driven by the Energy and Materials sectors mainly, which have heavily underperformed and seen a short squeeze with the jump in Oil back to $50 from $40.
We can see below that the market is balancing near the top of the range. Longs still have the upper hand and I would expect to see an attempted breakout at least. Note the 2020 pullback high in August where we may see responsive sellers step in ahead of.
The rapid short squeeze has taken a lot of the buying power out of the market so I'm expecting a two-sided week as shorts try to press below into the weak structure and gaps formed on the rise. Longer time frame longs may be looking to buy on dips and not chase prices too much up here. Short term, we may see an attempted break higher to run stops followed by aggressive selling back down to the top of value of the range. If prices push and hold above 2020, we may see continuation of this rally back up to the high volume levels above.
Friday's RTH trade left a poor high, which is likely to be revisited as stops above the top of the range. If the market can trade and hold below Friday's low, we could see a liquidation break through the area highlighted and potentially down to the naked VPOC/POC from 10/08.
The week ahead for US data is here
ES review & plan
Yesterday's move higher was on less volume than the prior few days, though still reasonable at 1.8m contracts and 3.9bn shares on NYSE. The pop following the FOMC minutes saw initial volatility, as is usually the case, but was supported by further buying and balancing within the rejection area from the 09/17 FOMC day.
The daily chart above shows the move higher overnight has tested the bottom of the range the market was in for most of the year. Holding above the 20 day sma is a bullish sign for longer term traders and we may see a pullback to test that now the bottom of that range has been tagged, which is also a composite LVN.
The 240 min chart below shows the value area of the current range, which is currently being tested at the top. The bullish momentum and decent volume on the rally so far leads me to believe we'll see a continuation higher to find sellers. Short sellers are adding momentum as they are stopped out, so I need to see evidence of buying drying up and sellers able to regain control before considering shorts at the moment.
If we see a break, the first area to retest is the area highlighted below, ideally down to the overnight high from yesterday. If buyers support that area then longs remain in control to carry on the rally. Failure under there and a move into the range from Wednesday could see rotation lower and risk a long liquidation break.
The overnight range so far is 1998.75-2014.00 versus settle at 2006.50
ES review & plan
Volume continues to be strong at 1.9m contracts and 4.6bn shares on NYSE. The market is balancing above value of the range since the Aug 24th low.
Yesterday's pop higher in the morning saw a sharp reversal at the composite low volume area, which could have been overnight inventory correcting with weak longs liquidating and shorts pressing back to pre-market support.
Longs stepped in to push back above the prior day's range again and left value higher on the day. Short term control remains to the long side and the market would need to hold below 1960 to risk a more serious liquidation break and filling in of the gap visible on the RTH chart below.
Overnight has stayed within yesterday's range so far trading between 1971.00-89.25. I'm looking for dips to be bought and an attempt to take out yesterday's high. If we see failure at overnight support shown below, the poor low from yesterday could be targeted initially.
ES review & plan
Yesterday saw a brief move above Monday's high, followed by a balancing day. Volume was 1.6m contracts and a healthy 4.2bn shares traded on NYSE.
The market is pushing back up towards the top of the current range on reasonable volume and buyers remain in control short term having one time-framed higher for the past week. Shorts on the move up have added momentum to the move as they are stopped out. I'm expecting a continuation higher to force more shorts out before we see a reversal,until the market shows evidence that the longs have given up.
Some levels of interest below from the FOMC day:
Overnight saw a brief dip below yesterday's RTH low and rallied back through the range above the high. The breakout and pullback areas highlighted are support going into the open. Shorts need to hold below the last 2 days value to really put the pressure on longs and push down into the RTH gap below.
ES review & plan
The above 240 min chart shows the current area of balance we have been trading in since the Aug 23rd low. The rally from last week has pushed through the value area and so far holding above it. The rally has left behind gaps and poor structure in regular trading hours, but we may still push above yesterday's highs before we see an attempt to push back inside value - 1990.75 target (composite LVN) above.
Yesterday saw a drop in ES volume at 1.67m contracts, though underlying share volume was strong at 4.3bn turnover on NYSE and very strong advance/declines.
Overnight the range is currently 1963.50-1975.25, inside yesterday's value. If we see failure at yesterday's VPOC after the open, I'm expecting a move through the overnight low and attempt by sellers to press lower into the gap. If the market can push and hold above yesterday's VPOC I'm looking for a first target at 1985.00 ( 09/17 nVPOC), then 1990.75 (composite LVN).
ES review & plan
Friday's big miss on the NFP number saw a big sell off pre-market after earlier trading above Thursday's high. After the open there was a lack of continuation to the downside, though some heavy volume building below Thursday's low. Once back inside Thursday's range the big rally took off and we saw the market one time-frame higher all day on some very aggressive buying action.
Volume was good at 2.46m contracts and 4.36bn shares on NYSE.
There has been continuation higher overnight to the top of value of the range above. We may see some filling in of the area highlighted before an attempt to push through the high of value towards the composite LVA above.
The overnight range is 1937.25-1959.25 versus settlement at 1943.00
In the regular trading hours we can see areas above and below to test. Friday's single prints and balance support zone on a pullback and the 09/21 levels and small gap above. Short term, longs are in control above the 1917.50-26.50 balance area from Friday.
ES review & plan
We saw a strong move up overnight yesterday which sold off heavily into the open. The early attempt to hold above Wednesday's range, and then top of value, failed. This led to a move through the prior day's value, but the break below it failed to continue and we saw late shorts trapped and forced to cover as the market moved back inside the initial balance and closing near the high.
Overnight has pushed above yesterday's RTH high but below it's Globex high. The range is currently 1912.75-1927.50 versus settlement at 1916.75.
Some key RTH volume pivots above here are an nVPOC at 1938.00, (with an open gap between 1942.50-44.25) and another nVPOC at 1952.50. Below we have yesterday's VPOC at 1903.50 and the 09/29 nVPOC at 1874.50.
Ahead of the NFP, the market has moved back to the VPOC of the Globex range since Aug 24th. Short term value has been rising but there's a risk longer time frame sellers could still take control if the market fails to hold above this high volume region.
ES review & plan
The end of the quarter saw a reversal higher after a strong rally overnight. The was a liquidation break mid-morning as the market appeared to have got too long in the day time frame and from overnight inventory. A brief dip into Tuesday's range saw buyers step in again, seeing value higher than the prior two days.
Volume was healthy at 2.2m contracts and 4.5bn shares on NYSE.
Overnight the rally has continued, pushing back into last Friday's range. Currently 1901.25-1929.50 is the Globex range versus settlement at 1908.75.
Bigger picture shows rejection of low volume composite area and pullback to mcVPOC.
We have Jobless Claims and ISM Manufacturing at 07:30 and 09:00 ct.
If the market rejects the overnight high after the open, I'm looking for a back and fill move of the thin overnight traded area. Above the overnight high, the nPOC/VPOC from 09/25 are the next targets (1936.00 & 1938.00 respectively). Holding below the overnight low looks less likely at this point, though if this occurs we should see a test of yesterday's low and potentially Tuesday's nPOC/VPOC.