Monday Prep
Last month's range: 2317.75-97.50 2365.00 VPOC
Feb range: 2261.00-2367.25
Neutral/Bullish
Last week's range: 2317.75-66.75
Weekly has made lower lows for past 2 bars. Acceptance above 2265.00 puts buyers back in control.
The profiles from last Weds and Thurs has left weak highs vulnerable to a break out above. Volumes have been low on the squeeze up from last week's low. We'll need to see increased volume and market breadth to maintain a rally above the 2365 level to regain the down move from March 21st.
Overnight has ranged between 2356.00-63.25 so far, taking out Friday's overnight low at 56.75. A fairly busy eco calendar is due this week with the FOMC minutes and employment report the highlights. 2365 is the key pivot I'm watching for a clue to short term direction. Failure to break through opens up the chance of a move lower into the poor structure from last week.
Zones for today:
Friday Prep
Yesterday opened within prior value, briefly tested the VAL on fairly neutral market internals and proceeded to break through the VPOC causing another squeeze on shorts into the break down area from the 21st. Prior broken initial resistance became support on the midday retest.
A poor high was left again and the profile was P shaped indicating short closing action. Volume was again low at around 1.1m contracts.
Overnight has stayed within yesterday's range and is currently 2356.75-65.75 on low volume. I would expect a pick up in activity into today's quarter end close. For bulls to keep dominance there will need to be acceptance back inside the RTH low from March 20th at 2365.50. Holding above there keeps the pressure on shorts left open. I would still expect to see sellers step in to defend the breakdown from the 21st. Failure to move higher and a break below yesterday's overnight low at 2356.75 could start a long liquidation move from short term positions. The weekly VPOC is at 2357.50 and the monthly at 2365.00, pretty much the same range as overnight.
Thursday Prep
Yesterday's 11 RTH range stayed within the prior day's upper half. The failure to break through the prior day high was likely due to a lack of volume, with only 1.1m contracts trading. The lowest pullback after the break above the initial balance was at the opening price, 2351.75, a line in the sand for today. A poor high was left at 2359.75 and VPOC at 2357.25.
Overnight has so far ranged between 2353.25-62.50, breaking above Tuesday's high during the Asian session and selling off since then, though cumulative delta has remained fairly neutral. Going into today I think the risk is to the downside while the market holds below 2357.25. Shorts are likely to initiate below 51.75 and 50.00 and I'm looking for a response from buyers at 2342.50. If that fails we could see an attempt to auction down to the bull/bear zone again.
On the upside a move above and hold at 57.25 opens up the chance of a breakout to the upside. However, given the strength of the impulsive wave lower on Mar 21st, I'm not expecting that to be reversed without a fight and will be looking for sellers to defend the resistance zones above. Volume, momentum and market internals will need to be watched carefully for supporting/contradicting information.
Today's zones are below:
Tuesday Prep
Yesterday opened at 2321.00 vs the prior day low at 31.75 and settlement at 44.75, leaving a large gap and shorts sitting on decent gains. The failure to take out the overnight low by 1 tick was the first evidence that shorts could start to cover.
The 2 min chart below shows reactions at yesterday's zones. We got acceptance back above the bull/bear zone. Clear reaction on first test of the 40.50-41.50 and support at the B/B before another attempt to break resistance before the close.
Overnight has seen a range between 2334.50-44.00 so far, having sold off from the highs since the European open. I'm keeping the bull/bear zone the same and if that continues to hold I would expect further balancing within the upper range of yesterday or another attempt to squeeze shorts above yesterday's high. If the market starts holding below 31.75 then sellers are likely to be active looking for a break down again.
Today's zones below for today:
Monday Prep
Apologies to my regular subscribers for the extended break in service, I've been renovating my house for the past few weeks and living in a building site, but I'm finally back to some normality again!
The weekly chart below also shows the monthly profiles. Although March so far remains inside of Feb's range, we've seen a downtrend begin on the weekly candles as trade re-enters the thinly traded 2290-2230 area.
The daily chart below shows continuation from the impulsive move lower last week and the short term balance of the past few days. It's also the first time the market has held below it's 50 day sma since before the election. The next major area to test below is where the market broke out in Feb, around the 2290-95 zone, and then the low for Feb at 2277.50.
The break lower overnight has left initial resistance at 2331.50-33.50. Acceptance back above that zone will trap shorts from overnight and could see a move back towards Friday's settlement at 2344.75. It remains to be seen if we are going to get more of a reaction from the healthcare vote failure on Friday and have a bigger liquidation - I would expect it to, however, if overnight inventory has got too short we may see a correction to that before sellers step in again.
So far the overnight range is 2317.75-37.50 on above average volume, along with a drop in the dollar, bond yields and crude. In terms of trend, the monthly is neutral and the weekly and daily time frames now bearish.
Zones I'm using for today are below, with the short term bull/bear zone at 31.75-33.50. Holding below 31.75 increases the chance of further liquidation to test the breakout area from last month. Holding back above the bull/bear zone puts the market back inside last week's balance area where we could see responsive sellers step in at the zones above.
Thursday Plan
The overnight range has so far held above yesterday's IB high (89.25) and the market remains strong above there. If there is a break through the overnight low then I'm waiting for the 81.50-82.75 zone for potential longs, depending on market dynamics at the time. The resistance zones marked are not areas I want to short necessarily, more pause points on a move up.
After yesterday's breakout my main expectation is for higher prices to hold and potentially extend yesterday's range or to consolidate within yesterday's range. The least likely scenario I see would be for yesterday's gap to fill in today, given its magnitude.
Wednesday Review
Following Trump's speech we've seen a relentless bid under the market and a near parabolic squeeze higher. The near 40 point full session range yesterday saw cumulative delta peak around +75k into 2400. Short exposure being covered has accelerated the move higher leaving a large range gap in RTH, well above the February VPOC at 2362.25.
Overnight there's been a slight drift lower, with the range currently 2389.50-94.00. Yesterday's overnight high at 82.75, 50% pullback of yesterday's full range at 82.25 and yesterday's open at 81.50 is the initial anticipated support zone. Yesterday's market profile left a poor high at 2401.00, likely a function of short term traders getting overly long into the highs.
Buyers remain in control and shorts are vulnerable to a further squeeze while the market holds above yesterday's initial balance high at 89.25 and a re-test and potential follow through of yesterday's high would be on the cards.
If 89.25 fails then initial support at 81.50-82.75 would be the next expected buyers response zone. Acceptance below initial support leaves the open gap to test.
Zones for overnight:
Tuesday Plan
Overnight
The market has held a tight range between 2365.50-68.75 so far on light volume ahead of several important numbers.
Overnight support 64.75-66.00 Overnight Resistance 68.75, 70.00-70.75
A fairly business calendar today (times CT) with Trump's speech to Congress this evening which could trigger a big move in Globex tonight.
If overnight support can hold then it's a fairly easy run up to new highs. For the past two days we've seen aggressive buying into the close, both around 30k cumulative delta. A break below the range vpoc could see a test of yesterday's range or break lower trapping recent longs
Monday Review
Review
The bullish bias continued yesterday with the market opening above the prior day's value area, briefly testing lower and then making a move for the overnight high. There wasn't sufficient strength to continue the move, but it held up, settling at 2168.25. Volume was low at 1.1m contracts.
The daily RTH chart below has the monthly volume profiles which shows the current balance area between the 2350-70 area, with a VPOC at 2360.50. This is a pivotal level and for the short term bullish bias to continue in alignment with the longer term, I want to see the market holding above there.
Friday Prep
Europe has been weak overnight, pulling ES below yesterday's lows. I'm using 2353-55 as the bull/bear zone for today. Yields are down sharply in the long end with the 30yr back below 3%, currently 2.99%.
If we see acceptance below 53.00 then there's a good chance we could have a liquidation break down to last week's value low (2332.50). However, the overnight move has been driven by Europe and depending on market breadth and momentum after the open there could be a short covering rally if the 53-55 zone is regained.
The support zones shown below are all valid response areas in line with the longer time frame bullish bias but order flow and market internals will need to be watched carefully for signs of continuation lower or not. A squeeze higher above the bull/bear is likely to gravitate to the week's vpoc area at 59.50-61.00, where the market broke down overnight. Above there is potential for a further short squeeze back towards the highs again.