ES Recap & Preparation

Yesterday saw value move higher after an initial test lower to motivate buyers. The break higher to the CLVN at 1956.25 rejected and prices reversed rapidly on a news story of someone in New York testing positive for Ebola. The panic algos took over taking prices down to the overnight high, which saw buyers hold and push back up towards the VPOC into the close.

The overnight session has so far seen a break of yesterday's pit lows but still within the balance area of the past few days and currently around the micro-composite volume point of control (mcVPOC). While within this balance area I'll be looking for levels to fade around it. If we see a break of balance I'll be looking for pullbacks to join the momentum.

My bias is for a break lower going into the weekend as short term longs don't want to take any chances given the effect of the news headlines in creating panic.The VPOC from Oct 22nd remains untested in the pit session for an initial downside target. The 1918.25 area is the main bull/bear zone where swing shorts were in trouble on the way up. The gap from 1910-1900 remains open and the next target if it breaks.

If, however, buyers continue to drive prices higher, then there is a high volume chop zone between 1956.50-1971.00. Key potential resistance at the 1968.50-71 area prior swing highs earlier in the month. A move above there puts the all time high back in the sights. This high was also made in the globex session only and has never been touched in the pit session.

Volumes in the ES contract has tailed off considerably in the past few days and the VIX has pulled back to 16/16.50 area after peaking at 31 last weak.