Tuesday Prep
The market continued to balance in the lower half of the current range's value area. Yesterday was a narrow range during RTH, leaving both a poor high and low, with volume skewed to the downside.
Until the market can break above Friday's high, bias is more to the downside. We have yet to see the October low at 2107.75 tested, which if broken is likely to run through to the 2100 area and potentially lower, back into the composite high volume area. FOMC tomorrow (low odds for move) and NFP on Friday, and a week until the election...buckle up!
I'm using 2119-21.00 as bull/bear zone for today - a break and hold below there could see a liquidation move lower, depending on what volume and market breadth we see. We could also continue to see chop in the 2121-31 area.
Monday Prep
Today's Zones
Overnight we got the start of the move talked about in the weekend review following the AT&T/Time Warner news. The breakout has pulled back to retest and is currently at a potential launching point at the 2143.75 CLVN.
I have the bull/bear support zone at 2134.75-37.25, though we may see the 42.50-45.50 zone hold as support if buying flows remain strong into the RTH open, not closing the current gap. Short term bias is long above the bull/bear zone with the 52.25-56.25 zone as a target - this includes the composite high volume area and open RTH range gap between 53.75-56.25 (Oct 10th/11th). There's potential for extension to the 59.00-60.50 zone.
If the bull/bear zone fails to hold I would look for responsive buying at the 29.25-30.25 zone and be cautious of longs if that breaks.
Weekend Review
The daily chart above shows the current balance area trading inside the yearly vwap 1st SD band and up against resistance from the prior balance area. A rally back up through this resistance has potential for a big short squeeze but still faces longer time frame resistance above. If sellers can take out the current balance lows we have potential for a decent long liquidation move back into the composite high volume area towards the yearly vwap.
The big deal news of AT&T buying Time Warner should put a strong bid under the market to kick off the globex session later, I would expect.
Friday's early attempted break lower failed and traded back into the prior day's range to reach the prior vpoc as it's high and close around the weekly vpoc. If we see a move above Friday's high on the Globex open we're likely to see a short squeeze and another attempt to break out of current balance to initially target the 2152.75 CHVN
Friday Prep
Yesterday's overnight breakout attempt failed and we saw the RTH high fail to push above the prior day's value. The morning break lower held just above Monday's globex swing low and most of the afternoon traded around the current range vpoc at 2135.
So far overnight the range is 2128.75-38.50 and has been in a downtrend from the high. Going into the open I'm using 32.25 as a bull/bear level ( yesterday's overnight low/Weds RTH low/overnight vwap/weekly vwap).
Holding below 32.25 increases chances of move to close Monday's settlement gap and nVPOC and test the poor low at 16.75. The 16.50-18.50 zone is where we may see longer time frame support. Above 32.25, the 37.25-39.25 zone is initial resistance I have for today.
Thursday Prep
Yesterday pushed higher into the longer time frame resistance zone (40.50-42.50) and left a P shaped profile and poor high which increases the likelihood of continuation higher unless we see acceptance below yesterday's open (2136.50).
Overnight so far the range is 2136.25-2144.50 ahead of the ECB announcement. I would expect to see either a false breakout and reversal lower or a breakout up towards the next CHVN at 2152.75.
Having pushed through yesterday's RTH high overnight, the initial battle zones for either side I see as 36.25-38.50 for longs and 42.50-44.50 for shorts. Breaking and holding below/above these zones could see a directional move either way.
Wednesday Prep
Yesterday's initial move lower into the 29-31 zone found support from buyers and the rally then struggled to hold above the 37-37.75 zone (Friday's pullback high to open) which then saw a drop back to initial support into the close.
Overnight the range is currently 2126.50-35.50. The vpoc of the current balance is 2130.50, which bulls will want to maintain control above. The 40.50-42.50 remains key resistance and a move and hold above that zone could lead to a short covering rally back up to the prior balance vpoc at 52.75.
Initial support zone at 29-30.50 and holding below there puts sellers in control with initial target at yesterday's overnight low at 2120.25
The 4hr chart with custom profiles shows areas of balance below:
Zones for today below:
Tuesday Prep
Yesterday opened at 2127.00, which was the prior day settlement, and tested higher to 2130.00, which was the prior week VPOC (see below), and rejected it quickly. Market internals were not overly weak despite the bulk of trade taking place below the prior day's low.
Overnight the market has trended higher with the range currently 2120.25-2139.75, pushing up against towards longer time frame resistance. Holding above the 29-31 zone puts shorts offside from yesterday, but holding below there could see retest of yesterday's low. Breaking above the 40.50-42.50 zone puts the 51.25-53.75 zone next target.
Updated zones for today below:
Monday Prep
The gap up open on Friday built volume above the overnight high in the morning, in an area of potential longer time frame resistance. Short term longs were forced to liquidate on failure to gain ground and sellers dominated down to the prior vpoc/close area. The pullback rally stopped 1 tick below the initial balance low before sellers stepped in and made new lows after the cash close, following a strong sell-off in bonds.
The 4 hr chart below shows the areas of balance since the Brexit vote. The market is currently holding above the composite low volume area just above 2100. A move lower through and rejection on re-test would indicate a continuation lower to test the breakout points from July and back towards the composite high volume area around the 2046 CVPOC.
Overnight the range is currently 2116.75-2128.75. Earnings season is in full flow this week. Zones for today below - expecting sellers to step in on rallies unless market can hold above Friday's high.
Friday Prep
The large gap from yesterday's open continued lower straight through the overnight low and stopped at the Sept 15th swing low at 2107.75. This had potential for longer time frame buyers to step in and trap a lot of shorts with the market over 20 points off the prior close. There was aggressive buying in D period and a trending move higher began once holding above the open, back towards prior settlement
Overnight so far the range is 2122.25-38.75 having rallied during the European session. Bonds have given back their gains from yesterday post 30yr auction. Financials are in the spotlight for earnings today with JPM already reporting better than expected numbers, with retail sales and PPI due at 07:30 ct.
Today's zones i'm using below - if the market can break through the 2138.25-40.50 and hold above we could see continuation higher towards the 2152.50 CHVN
Thursday Prep
Yesterday's trade was balanced and concentrated in a small range around the prior day VPOC ahead of the Fed minutes. The break higher stopped at the prior day pullback level at 2159.50 and the continuation of the prior day's trend didn't happen until after the RTH close.
Overnight has broken lower, driven largely by weaker than expected Chinese trade figures. The range currently is 2131.00-2113.50, bouncing off a settlement gap from Sept 14th. The majority of volume traded so far is in the 2116.25-19.25 area. Notes and bonds have rallied from yesterday's lows. There's certainly a risk-off feel to markets today and we are likely to open on a large gap lower given current prices. My primary expectation is for sellers to be active on rallies and for a potential test of the larger time frame support areas from last month. Acceptance back inside yesterday's range changes short term bias to more neutral.
Zones for today (short term bull/bear zone 2126.25-27.50)