Month Review Jan 31st
It was a strong finish to a high volume, big range, heavy sell-off month. The defensive utilities and consumer staples sectors ended positively with the cyclical sectors suffering the heaviest losses.
Globex average daily range was 51 points and volume 2.51m contracts. Average daily turnover on NYSE was 4.82bn shares.
The largest range, highest volume for ES and NYSE, low print and settle for the year all occurred on Jan 20th. Volume of 3.9m ES contracts and 6.3bn shares on NYSE traded that day.
Friday had an open drive breaking out of the recent range which had been building energy for a sharp move either way and trended higher all day with no significant pullbacks. Overnight, the game will likely be either to continue squeezing as many shorts out as possible above Friday's range or we'll see if the bears regain control. Short term bias is with the bulls though, but we may see some back and fill to the anomalies shown on the market profile/thin areas on the volume profile.
Review Jan 27th - FOMC Day
The market broke the balance area of both sides of the past few days and left 3 distribution areas. Volume was 2.1m contracts, below average this month. The range was 45.50 points, also below the average and settlement was at 1875.00.
I'm cautious of longs now until the market can hold above last weeks close (1899.25). Overnight I see potential resistance at 1877.75-78.75 & the 84.25-87.25 zone and if that breaks I'd expect it to try and rotate back up towards 1900. Below I'm still using the zones from today's plan below. The 1849.50-53.00 zone I see as highest probability long on first test, assuming no exceptional news.
Review Jan 26th
Trade was light again in volume terms with 1.77m trading versus nearly 2.8m average this year. The RTH range was 25.25 points against 48.5 for the full session. Shorts were forced to cover with the early rally in crude but this failed to be enough to push back above 1900.
The P shaped profile left today leaves longs vulnerable underneath the 1888 area. After hours Apple have reported an earnings beat, missed sales and Q2 revenue estimates lowered, plus crude showed another big API build.
Overnight, holding below 1888 could see a retest of the 69.25-71.25 zone. Holding above that we could continue rotation higher towards 1900.
Review Jan 25th
It was the lowest ES volume of the year so far at 1.63m contracts and the afternoon sell-off was accelerated by crude. Value overlapped lower to Friday and spike rules apply for tomorrow, as per Jim Dalton.
We may see a rotation lower to the settlement gap and composite LVN in the overnight, but the short term bias is bearish below the top of the spike at 1881.50.
Review & Plan Jan 25th
The big move happened in the overnight session on Friday and the range stayed very narrow in RTH compared with the rest of January. There was aggressive selling as seen in cumulative delta, though this failed to stop buyers accumulating above the prior day's range.
The market opened on a gap higher and once the range gap was closed to the tick, this was a good opportunity to go long in the direction of the gap.
Volume was the second lowest of the month and was the lowest relative to NYSE volume.
Year to date
The big bounce in crude was the main driving force behind Friday's rally:
Friday
Overnight so far the range is 1887.50-1904.25 versus settlement at 1899.25 on lower volume than we have seen so far this month, and could see an impact in volumes today due to the snowstorms in NY at the weekend.
The RTH chart below shows the naked VPOCs in range above and below:
My zones for today are below. The 1880.75-83.25 bull bear zone is going to keep me looking for longs above and shorts below the zone. Value has been moving higher for the past two days and with a lack of data today we may see some balancing and attempt higher. If Friday's RTH low is broken however, there's potential for a quick liquidation move to target the settlement gap at 1861.00.
Review & Plan Jan 22nd
Overnight has rallied, along with a 5% jump in crude. The range is currently 1855.75-92.00 versus settlement at 1861.00. We may see a correction to overnight inventory before an attempt high. Zones for today are below:
Review & Plan Jan 21st
Yesterday was a new low on the day, settlement low and the largest range of the year. Volume was exceptionally high at 3.9m contracts and 6.3bn shares on NYSE - 40 and 30% higher than the average this year, which has already been very high.
After the initial squeeze above the overnight balance area yesterday, sellers aggressively stepped in taking the market through the August lows
The RTH chart below shows the settlement gaps and nVPOCs above the market currently. We have the nearest HVN at 1968.50
Overnight the market has been balancing above yesterday's mid point. Draghi is on the wires currently and sees risks on the downside and significantly lower inflation for the year ahead.
The range is currently 1836.25-1876.00. Zones for today are below. The bull/bear zone remains at 1880.25-82.25 and will be very cautious of shorts above there.
Review & Plan Jan 20th
Despite yesterday's overnight squeeze higher we saw the market settle at it's lowest level for the year. The RTH high at 1896.25 was a 50% pullback from the recent swing high to low.
Overnight has seen new lows for the year with the range 1829.25-1878.50. Despite the negative trend the market has potentially got itself too short overnight and there is potential for a squeeze . The overnight profile has balance well below yesterday's low. We may see a squeeze to force overnight shorts out before resuming the downtrend. If this fails to happen the chances of hitting the August lows today have increased I believe.
Zones of interest for today below and I have moved the bull/bear zone down to 1880.25-82.25, which was the pullback high from yesterday afternoon.
Overnight Profile
Review & Plan Jan 19th
Year to Date
Friday made a low for the year on the highest volume for both ES and on NYSE after taking out the lows from Sept 29th and reversing strongly. We may have seen a short term low and see an attempt to push back up towards the 1980 area this week, where the breakdown began, which has potential to be a fast short covering rally. However, I'm watching the resistance zones carefully for signs of heavy responsive selling if it pops higher. If the market remains below the 1892.50-94.50 bull/bear zone I'm staying cautious on longs, and if it starts to trade below 1960 it's a warning sign we could be heading towards the August low.
The regular trading hours chart below shows the large settlement gap left from Thursday.
Overnight (and including yesterday's electronic trade) the range is 1859.75-1906.50. There's been a bounce in Crude and weakness across the Treasuries.
Zones for today are below. Above the 1892.50-94.50 I'm looking for long entries on pullbacks, which is the primary expectation today. Below there we could re-test down to Friday's VPOC and the 1868.50-71 zone
