Tuesday Prep
Opening in the 32-34 zone yesterday, the initial rally failed one tick above the overnight high. Volume was very low on the day at 924k and two distributions were left with the majority of time and volume spent lower, within the prior day's range.
Overnight the market moved slightly lower, tagging the 18.50-20.50 micro bull/bear zone. The strong rally of the past week or so is running out of steam, but that doesn't necessarily signify a reversal. Holding back below 18.50 puts the market in a more neutral/negative state short term in my view and could see short term long liquidation and revisiting of the weak structure left on the way up.
Today's zones of interest are below. Retail sales are due at 08:30 ET for how consumer spending went in April, consensus expecting a 0.3% gain m/m.
Monday Prep
The short term bullish bias continued on Friday with price balanced between the micro bull/bear zone and initial resistance for most of the session, with a brief attempt to break below which failed. Daily value was left overlapping higher leaving the gap and weak structure from previous days untested on the week.
Overnight so far we've seen another move higher, with the range currently 2727.25-41.00. The 2742.25-45.25 initial resistance zone represents a key reversal area from March as well as a composite low volume area. If we have a push into that zone and buyers fail to get through, I would expect a move back down into the 2718.50-20.50 micro bull/bear zone. Holding above 2545.25 puts the squeeze on shorts even more as another daily swing high gets taken out. However, I would expect a selling response at IR on first test...we'll see.
Zones of interest for today are below:
Friday Prep
Yesterday's weaker than expected CPI data kept a bid under the market and pushed through the initial resistance zone before the market open, leaving a gap above the prior day's RTH high. This zone acted as support once broken and was the launching point of another strong rally which took out the April high (2718.50).
With the 130 point low to high range of the month so far, shorts have continually been forced to cover, accentuating the moves higher. One thing that seemed odd yesterday was that despite the strong price rally, underlying stock momentum showed on the NYSE TICK was not particularly strong. Volume was fairly low too at just 1.1m contracts. If the rally is to continue the really major test above in my view is the 2742.25-45.25 zone which represents a key breakdown area from mid-March. Ahead of that the 2732.00-34.00 zone was also a pivotal area from March which could see sellers step in again.
Overnight so far the range is 2716.25-26.75 versus settlement at 2718.75. I'm using 2718.50-20.50 as a micro bull/bear zone on the day timeframe. Acceptance either side of that zone today could help establish the dominant side, though clearly all the short term trends remain bullish within a very large range. My zones of interest for today are below:
Thursday Prep
Going into yesterday the basic plan was: 'Short term bullish bias if the 68.25-70.75 zone holds or it could turn neutral again. Holding above the 81-82.25 micro bull/bear could see a squeeze higher.' The test lower in the morning didn't quite make it to the 68.25-70.75 zone though left a poor low where shorts got trapped. You can clearly see below the early attempts to test the micro bull/bear failed until the fourth attempt where we got the short squeeze - seen by the single prints in the profile above.
Overnight so far the market has been in a tight range and has tested the 2702.75-04.75 zone with a range of 2692.75-02.75 so far. CPI is due at 07:30 ET which has potential to be a catalyst for some action if there are any surprises versus consensus.
I'm using Initial support at the 2690.50-93.25 zone and resistance at 2702.75-04.75. A break below 2690.50 could see the single prints filled in from yesterday and retest the breakout area. Broken support above then becomes resistance on any move back up.
If things turn really negative and yesterday's low get taken out we could see a more serious liquidation to challenge last Friday's breakout, though we'd need some very negative news to do that today.
If initial support holds and buyers push through initial resistance, the next target is the 2716.75-20.50 zone.
Today's zones of interest are below. Yesterday's prominent VPOC at 2696.00 could also act as support if buyers have control again today.
Wednesday Prep
The daily chart above shows the volume at price since the start of the year (left profile)and we can see price has made a bullish recovery over the past few sessions and is looking like it wants to breakout to the upside. This is going to need volume and momentum, together with broad market strength or else this could lead to a false move. If this does turn out to be a false move then the weak structure left from last Friday could be revisited sooner rather than later. If, however, the rally does have legs then the next major upswing swing high is at 2718.50 (a poor high left in the 4/17 overnight session). Although I don't use trend lines per se in my analysis, I need to be aware that many do and the upper trendline on the daily is also shown (around the 2704 level today).
Yesterday's profile balanced overlapping below Monday, though still supportive of Friday's bullish move. Trading got choppy in the afternoon with headlines about Iran, sometimes false, took crude on a rollercoaster ride.
Overnight so far, the range is 2666.50-84.50 versus settlement at 2670.25.
PPI-FD is due at 07:30 ET and a 10 Year Note auction at 12:00 ET. Zones of interest for today are shown below. Short term bullish bias if the 68.25-70.75 zone holds or it could turn neutral again. Holding above the 81-82.25 micro bull/bear could see a squeeze higher.
Tuesday Prep
We did get a move higher into the 81.00-83.75 zone yesterday after opening just above the prior high. There was a lack of upward momentum and volume to support the rally, which eventually fell back to close the settlement gap.
Overnight so far has drifted lower to test the 57.00-58.75 zone, with the range currently 2658.50-72.25. We have extra geopolitical risk with Trump's update on the Iran deal - WTI crude is currently down about $1 at $69.80 with record long positioning in the contract.
If the market can hold above the 57.00-58.50 support zone we could see an attempt to retest yesterday's high, though I'd expect the 69.50-72.50 zone to be the first major hurdle for buyers. If we see 57.00 break and hold below, a move lower into the next two zones is possible depending on weakness. 2647.00 is the month's VPOC so would be looking for a reaction there.
Zones of interest for today are below:
Monday Prep
Friday's open dipped down into the 2610.25-13.00 zone briefly, which represented the prior day mid and breakout point. Rejection of this zone was a clue buyers could once again dominate, though the driving rally showed signs of a short squeeze with single prints left in it's wake. Once above the prior day's high, the risk to short the market massively increased as positioning got squeezed higher.
It's a bank holiday here today with some well needed sunshine and heat, so will be leaving the screens. However, for those trading the market overnight has pushed above Friday's high, with a range currently of 2661.25-74.00 on very light volume and drifting higher.
The daily chart below has a custom volume profile from the all time high to date, showing the VPOC still at 2657.50 (a natural magnet on Friday if prices were rejecting lower moves, though much faster than I anticipated!)
New zones of interest for today are below. I would expect a positive first response off the initial support zone, but if that fails the monthly VPOC at 47.00 is next logical move. On the upside I can see sellers stepping in at the 81.00-83.75 zone, but a break through there could see a further squeeze into the 92.25-95.00 zone. For a sustained move higher, volume, momentum and market breadth are needed.
Friday Prep
Once again opening below the prior day's range, the market initial pushed down towards the prior week's low and then made a failed rally back to the open where sellers stepped in heavily leading to a fairly quick move to test the 2589-91.75 composite high volume area. Shorts got trapped as you can see in the 1 min chart above, where cumulative delta was still pressing the lows even though prices had made higher lows. This can be a bearish signal of more continuation to come but it also highlights the vulnerability of shorts to a squeeze on news etc. (see H period in top chart).
Overnight the range is currently 2616.75-34.25, post the employment report. We might consolidate in the mid of yesterday's range, which is difficult for good R:R trade location.
Zones of interest for today are below:
Thursday Prep
We got a decent range again yesterday with the main action after the FOMC minutes, which was to be expected.
I've shown on yesterday's zones above the key reasons for the zone placement, though this is always done in context and is subjective.
The failure on the rally to break above the late pullback high from Monday put sellers back in the driving seat as longs bailed out to push down towards Tuesday's low.
Overnight so far the market has remained weak with the range currently 2617.00-36.25, selling off strongly in the past hour or so. If we see the sell-off continue after the open, the next key reference is last week's low at 2611.25. If it fails to accept below that I would be looking for shorts to cover and see a rally back up to the 2633-34 high volume area as one scenario I can see playing out potentially with the hotly anticipated employment report tomorrow. Holding below last week's low is a warning bell for longs or potential longs.
Today's zones of interest are below:
Wednesday Prep
Yesterday opened outside of the prior day's range and continued it's negative pressure during the morning before a sharp turnaround at midday saw aggressive short covering, a gap fill and change of intra-day trend to bullish for the remainder of the session.
Overnight the range is 2643.25-58.50, with the initial bullish move after hours with AAPL losing steam. You can see from the daily chart above that the current VPOC since the all time high to now stands at 2657.50, and we have an FOMC announcement later. I've marked zones of interest for today on the RTH profiles below:
Yesterday opened outside of the prior day's range