Friday Prep
The strong rally overnight yesterday found support pre-market at the initial support zone, but this didn't get tested again after the open. The gap above the prior high left shorts in trouble and a the trend day higher would've been fueled early on by covering. You can see from the profile chart at the top how the declining market over the prior 3 days had left shorts vulnerable to a squeeze. I've highlighted the single prints left yesterday from the forcing action early on, which we may or may not see repaired today.
Once the bull/bear zone was broken there was a pullback to re-test 79.25 which was a composite low volume node (CLVN). The move higher fell a couple of ticks short of the 90.00-92.50 zone and drifted back towards VWAP into the close.
Overnight so far the range is 79.50-86.00 versus settlement at 85.00. Note the overnight low is 1 tick above the bull/bear and the CLVN. Acceptance back below the overnight low will be significant as there maybe an attempt to fill the range and settlement gap below, dependent on market context and price action etc. Acceptance back above settlement puts the bulls firmly back in the driving seat and has potential for a crack at the highs, though would still be watching for reactions at the red zones.
My zones of interest for today below.
Thursday Prep
From yesterday's prep: holding below the 62 level could see a long liquidation break down and see shorts push lower. For the intermediate time frame to remain bullish I'd want to see the 2549.00 level hold, which was last month's mid, VPOC and POC. If the market cannot hold below 62.00, shorts will be trapped and we could see a covering rally, though looking for sellers to step in at today's red zones.
Opening at 66.25, we got a move into the 62.0-63.50 zone straight away and some heavy volume driving through the overnight low and getting a fast liquidation break down to the 55.50-56.25 zone where responsive buyers stepped in. There was no downside follow through and stock momentum started to turn positive and the A/D trended higher from it's lows. Once back above the overnight low shorts were in trouble and we got a move up to the second resistance zone, which included the prior mid and Monday's low. Sellers stepped in and there was another test of the overnight low before the close before settlement at 2565.00
We had range extension lower for the month, but still holding above October's mid and VPOC at 49.00. Big picture's still bullish technically and the all time high hasn't been hit during RTH yet.
Overnight the range is 2562.25-75.75 having steadily moved higher all morning. We may see some correction of overnight longs after the open, though if the market is set to push higher I'd expect the 71.25-72.50 zone to hold. If not, 68.00-69.00 and 63.25-65.25 are areas I'd watch for responsive buying and potentially 57.50-59.00 depending on market context.
Above, a break and hold above 79.25 gets the market short term bullish again, in line with the longer term.
My zones of interest for today:
Wednesday Prep
Going into yesterday I had a bull/bear zone at 77.25-79.25. Below there put the current range extreme zone at 62.00-63.50 in the sights. The move down fell a few ticks short of that zone and saw a fast short covering move back up into the bull/bear zone, which was tested several times, saw a pullback into the initial support and a further attempt higher into the close but failing to break above leaving a poor high.
Overnight has traded lower since the ETH open, pushing down into the critical range support zone at 62.00-63.50 and making a new low for the month. The range is currently 2577.00-62.00 versus settlement at 2578.00.
As mentioned a few times recently, holding below the 62 level could see a long liquidation break down and see shorts push lower. For the intermediate time frame to remain bullish I'd want to see the 2549.00 level hold, which was last month's mid, VPOC and POC. If the market cannot hold below 62.00, shorts will be trapped and we could see a covering rally, though looking for sellers to step in at today's red zones. A rally back up through the 72.50 level puts the overnight high next target and the poor high and bull/bear zone next, which will bring more buyers in above.
Today's zones of interest:
Tuesday Prep
From yesterday's prep: There remain weak highs above which have a good chance of being taken out if the 72.50 level can hold, which is a composite high volume node (CHVN).
The market opened at the 72.50 CHVN after overnight attempting to force out some weak longs. Once open, shorts were trapped below the initial support zone from overnight and we saw a spike higher in the first 30 mins as seen on the profile chart.
Also from the prep: On the upside we still have the IR zone at 78.00-79.50 which if broken becomes support, as we saw on Friday.
We can see this is exactly what happened after the initial blast through the IR zone, with the pullback into it giving another buying opportunity for both new longs and covering shorts. Having rejected the overnight low, the target became the overnight high after taking out the weak high from Friday. As is often typical with a short covering day, we had a P shaped profile formed.
Overnight so far the range is 2575.25-82.25 on light volume. I'm using 77.25-79.25 as the short term bull/bear zone. Above there, the all time highs are back on the cards with some expected responses at the red zones shown.
If that zone doesn't hold then yesterday's low comes back into target in the 70.25-72.50 zone. We could see a buy response of the 67.25-68.25 and 62.00-63.50 zones, which were launching areas from last Thursday. Acceptance below there traps the recent longs and we could see a liquidation break. Also from yesterday: This month's low is at 62.25, which if broken puts last month's VPOC/POC and mid point into play at 2549.00. If the market begins to accept below that level risks derailing the bull in the intermediate time frame and we could finally get a move lower to retest the breakout from the 2504-09 area.
Monday Prep
Very slow day on Friday with trade remaining between the initial support and resistance zones for most of the session. Underlying stock momentum was weak so when there was an afternoon break above IR, there was little follow through.
Overnight so far the range is currently 2584.50-71.00 versus settlement at 79.50, having sold off from the highs all morning. There remain weak highs above which have a good chance of being taken out if the 72.50 level can hold, which is a composite high volume node (CHVN). There is PPI data due tomorrow and CPI and Retail Sales on Wednesday, Industrial Production on Thursday.
Weakness below 72.50 could trigger some short term liquidation. This month's low is at 62.25, which if broken puts last month's VPOC/POC and mid point into play at 2549.00. If the market begins to accept below that level risks derailing the bull in the intermediate time frame and we could finally get a move lower to retest the breakout from the 2504-09 area.
On the upside we still have the IR zone at 78.00-79.50 which if broken becomes support, as we saw on Friday. If we are seeing positive moves with the NQ and TF at the same time along with underlying positive momentum and volume, the weak all time high could be challenged again this weak. However, the market is in more of a neutral state with both sides active and looking to dominate short term. The long term trend remains in bull mode for now.
My zones of interest for today are below:
Friday Prep
A reminder of yesterday's prep: At the moment this just looks like an other side of range test after a failed breakout. The market has been in a balanced state this week and until we see aggression below this weeks low I'd expect a buy response to push prices back towards value. However, there'll be more overhead resistance to expect on a move back up. Holding below 75.50 puts the month's low at 62.25 into focus as the next range extreme, where a buy response would be expected on first test.
Once the overnight low was broken through mid-morning, which was also the re-test of the weekly low at that point, there was a break down towards the 62.25 monthly low (62.00-63.50 zone). This range extreme saw selling pressure abate and buyers step in, eventually squeezing shorts out and pushing back up into the week's value area and POC/VPOC.
Overnight we've seen a sharp move lower in bonds with accompanied weakness in stocks. The range is currently 2571.50-85.75. I have initial support at 72.50-74.25 today and failure to hold that puts yesterday's lows at risk and room for a breakdown below there the more that area is tested (49.00 next downside target). The 41.50-43.00 zone is a key area of longer time frame support which if broken has little structure below until the 2504-09 area, where the end of Sept breakout started.
Above, I have the initial resistance zone at 78.00-79.50. The 83.50-86.00 zone is key for shorts to hold or risk a squeeze back up to fill the 91.00 settlement gap from Weds/Thurs. It's worth bearing in mind we still have a weak all time high at 94.50 which has not yet been tested during the RTH session. The weekly and monthly trends remain bullish for now until proven otherwise, with the daily in neutral territory.
Zones for today:
Thursday Prep
Weakness in the Russell was weighing on the ES in the morning but it failed to test the prior day's low. Once back above the prior day mid, buyers dominated a formed a double distribution closing near the high.
Overnight in Asian time there was a push to new highs but this was a failed breakout. There has been a push down to test the low of the week at 75.50 which has so far seen responsive buyers step in. The range so far is 2594.50-75.50. At the moment this just looks like an other side of range test after a failed breakout. The market has been in a balanced state this week and until we see aggression below this weeks low I'd expect a buy response to push prices back towards value. However, there'll be more overhead resistance to expect on a move back up. Holding below 75.50 puts the month's low at 62.25 into focus as the next range extreme, where a buy response would be expected on first test.
Wednesday Prep
Yesterday's overnight market had made another all time high at 2593.50 and once the cash market opened there was a push up to test this level which was quickly rejected. Underlying stock momentum was neutral on the first move up and quickly turned negative. The Russell was leading the downside of the major indices.
Overnight so far the range is 2579.75-87.50. There's very little economic data due, though the EIA report at 09:30 CT could have an impact following crude's big rally over the past few days. There's also a 10 year note auction due at 12:00 CT.
Zones of interest for today are below. With the market in a more neutral state short term I'm expecting more two sided trade. If the 79.25-80.75 zone fails to hold then sellers will be targeting the 72.50 CHVN initially. A push above the initial resistance zone could still see sellers defend the zones above.
IR 2586.75-87.50
IS 2582.25-83.75
Thursday Prep
Apologies for the break in notes, I'm currently travelling and don't have access to my charts etc. I'll be back on Tuesday 7th Nov with the next update.
Good trading to all!
Wednesday Prep
A very slow and balanced session on overall low volume of less than 1m contracts, though there was very concentrated volume of over 350k at 72.25-75.
This has been a foothold to launch from in the overnight market where the current range is 2571.00-84.00, making yet another ATH, along with Nasdaq & Dow with the Russell still catching up.
Broken resistance zones become support and all time frames are on the bull trend ahead of today's FOMC meeting and after a strong ADP employment report.
Today's zones of interest: