Review & Plan - Friday
Review
Yesterday was a good example of the auction process playing out. Sellers had been dominant and bias bearish going into the day with the downside target at 2042, which is the most traded price in volume for the past 5 years (back adjusted). Buyers took over control and pushed back inside the gap, found support inside of Tuesday's range and eventually back up to the prior day's open and the current week's VPOC (see weekly profile).
Day session Market & Volume Profiles
Weekly Profile - Full session
Overnight
Extended higher to test Wednesday's VAH and found support at bottom of yesterday's short term bull/bear.
Current range: 2064.50-74.75
Plan
Quadruple witching today so be aware of increased volatility at the open and close.
I would look for a potential range between 2055-80 as my primary expectation, with bulls back in the driving seat - consolidating some of yesterday's range down to the mid morning pullback support and pushing up to test the FOMC high.
Review & Plan - Thursday
Review
Following the FOMC announcement, a quick look at the longer time charts is necessary. Firstly the weekly profiles and then the daily chart with the yearly VWAP(purple) and standard deviation bands. Both have a 1500 day composite volume profile on the right.
We are moving back towards the composite VPOC at 2042, which was the break out area from May 24th.
Risk off sentiment and plummeting bond yields driven mainly by central bank policy and Brexit concerns are likely to continue for now. A 'remain' vote next week in the UK is likely to see a huge unwinding of shorts and sharp rally back up towards the highs in my view, but for now, short term bias remains bearish.
Overnight
Continuation lower with current range 2051.75-65.00, taking out Tuesday's low. Settlement was 2063.50.
Plan
I'm using 2064.50-66.00 as the short term bull/bear today, following the spike lower and volume into the close. Overhead resistance is likely to see responsive sellers. Until market holds above 2079.50-81.50, I see sellers in control (this is now the longer time frame bull/bear zone)
Bias remains bearish and will be looking for shorts at resistance zones/dynamic intraday levels. Initial downside target remains 2042.
Zones for today below on the day session profiles and full session 30 min bars.
Review & Plan - Wednesday
Review
Overnight
Rallied higher with Asia and Europe, range currently 2059.75-73.25.
Plan
As per yesterday, holding above or below the slightly adjusted bull/bear zone will be key to my short term bias. (2071.50-73.25)
FOMC later - expecting increased volatility and keeping a close eye on bonds and the dollar. Rate rise is not expected and would be a major surprise to market. Yellen's speech and guidance key for directional bias post announcement.
The market has got very short going into the meeting,which potentially leaves a lot of buying to cover should we get a dovish statement.
On the downside, there's a poor low from yesterday and the composite VPOC at 2042 as main target below there. Above, the bull/bear, the market could easily rally back towards 2100 if there's a short covering scramble post announcement.
ES plan - Tuesday
Overnight
Range has extended lower from yesterday, currently 2063.25-71.75 vs settlement at 2069.75. Retail sales released - little reaction
Plan
Bull/Bear zone at 69.75-72 determining short term bias today. Activity maybe muted with FOMC meeting in progress.
Target/reaction zones below. If acceptance below 58 then targeting 42. Above bull/bear, resistance likely at zones.
Review - Tuesday
Review
The move lower yesterday did not have accompanying high volume on the NYSE, which was just 3.38bn. However, in light of the upcoming FOMC and Brexit risk events it would be understandable that some institutional participation is on the sidelines.
The 30 min day session chart below with composite volume profile (1500 days) shows the open gaps below (and above), along with naked VPOCs as extended purple lines.
Holding below the intermediate bull/bear zone at 2069.50-71.50 increases the chance of heading to the composite VPOC at 2042.00.
Review & Plan - Monday
Review
The break lower on Friday left a gap and double distribution, along with a poor high. There was acceptance back inside the prior balance area, below Friday's bull/bear zone at 88.75-90.75. Despite the sell-off, NYSE volume was not high at 3.5bn shares. Rollover from June to September continues with September now higher in volume ahead of expiry of June this Friday.
The day session 1 min chart below shows the reactions at Friday's zones and likely short covering into the close off the 79.50-80.75 zone back to the day's VPOC.
Overnight
Friday's low has been breached and so far acceptance within the lower distribution from Friday. The range is currently 2077.00-84.75 vs settlement at 2087.25.
Plan
Sentiment has been risk off driven largely by increased likelihood of a Brexit (according to polls). The bull/bear for today will be between the double distribution from Friday. Acceptance within the lower half increases chance of continuation lower and above of attempting to fill the gap from Thursday/Friday.
Day time frame Bull/Bear 2084.50-86.00 - acceptance above could see a short covering rally but still has overhead resistance.
Intermediate Bull/Bear 2069.50-71.50 - acceptance below here could see a more serious long liquidation
Zones for today are shown on the 60 min and 30 min charts below:
Zones - Friday
#ES_F review & plan for Friday
Review
Yesterday's day session in the June contract drifted slowly down to the bull/bear zone mentioned in yesterday's note (05-06.50), found buyers and promptly squeezed shorts to push higher into the initial resistance zone and the prior day's value area.
Overnight
Using Sept contract from now on - ESU6
Weak markets since the European open with the range currently 2098.75-2114.00. Move lower has tested the low made when Yellen spoke on Monday - key area for bulls to support.
Plan
Looking currently as going to open on large gap lower - looking for shorts on attempted close of the gap and/or resistance above for continuation lower.
Review & Plan - Thursday
#ES_F review & plan for Thursday
Review
Another example of a slow summer trading day yesterday with a new contract high, though the cash index (SPX) is still short of taking out last July's all time high.
The low volume small ranges this week have made poor highs each day, where I suspect day time frame buyers gave up and were not supported by longer time frame money.
The dips have been bought so far though the first major risk point for short term longs is the 2108.25-09.25 zone and last week's high at 2106.00. Acceptance below 06 could lead to a break down to the next key support at 2099/00 and then last week's low at 2082.75.
Above we have yesterday's poor high at 19.75 and just measured moves/fib levels above there.
There is still no excess at the highs which would signal that the upside auction is potentially finished if it was there. We're also 2 weeks away from the biggest scheduled market moving event of the year with the Brexit vote which will no doubt keep a lot of investment money out until this is decided. Key government bond yields continue to make new lows, e.g German 10yr now at 0.046%!
ESM6 - June
Overnight
Trended lower from the open with range currently 2109.25-18.50 vs settlement at 18.00. Crude has been drifting lower, now back below $51 again.
Plan
Jobless claims is main eco news at 7.30cst. Bulls still have the longer time frame bias.
Short term bulls have control above last week's high and the 2105.00-06.50 zone. This is my bull/bear zone for today.
Below there and looking for some long liquidation and shorts to press for 99/00 which is key defense area for longs in my view. Below there and caution longs as last week's low would be short's target.
Above 05/06.50, overhead zones are targets/short areas.
Broken support zones become resistance and vice-versa.
Will be watching market internals and momentum for a better read into any zones. Caution as rollover and volume/cumulative delta can be misleading.
Zones for today:
Review & Plan - Wednesday
Review
Very slow, low volume day making another new marginal high showing no sign off excess yet. Cash index still hasn't made new highs yet.
Bulls remain in control for now, though a liquidation break would be easily triggered on a news event.
The key areas of support are shown below. The 99/00 area if broken would be more likely to trigger a cascade.
Plan
Overnight is quiet ranging between 06.50-14.75. Bulls still have the upped hand and therefore will be looking for longs until key support is broken, when shorts will be preferred into the lower zones, which could still see responsive buying.
Review & Plan - Tuesday
Review
The progression since the beginning of May can be seen below with the custom balance areas.
The day session profiles below show value higher yesterday with an unfinished looking high and a key short term bull/bear zone at 2099/00 where the pullback low was made just above Friday's VPOC.
Yesterday's support/resistance zones on the day session 1 minute chart below
Overnight
Continuation higher with Europe and crude back above $50. Range currently 2106.50-2116.25
Plan
Above the micro bull/bear at 99/00 I have a bullish bias and looking for pullbacks to get long as long as we don't see very negative internals and high volume. Initial upside target at 2120.25 if yesterday's high holds as support.
Below 99/00 I would expect the look for shorts to target the zones shown below. 79.75/82.75 remains a major bull/bear zone which could spark a more serious long liquidation if broken.