ES review & plan
Yesterday's open was 1 tick below the prior settlement and after briefly matching that proceeded to target the overnight low and support level at 2044. Once this was broken there was thin volume supporting the move up on Tuesday and the prior low and naked POC/VPOC from Monday was the next target at 2038.50. There was little volume at or below this price and responsive buyers absorbed volume at the 2039 area before pushing back into the overnight range prior to the FOMC minutes forcing shorts to cover. After the minutes there was a 9 handle swing to 2050.50, through the overnight high and at the prior day VPOC, then back to 2041.50 as weak hands were forced out of positions and then rallying to close just under the prior day's close. Value was left overlapping lower. 3.4bn shares traded on NYSE and 1.1m ES contracts.
The overnight market has so far been weak testing for support below yesterday's lows. CPI and jobless claims are due at 07:30 ct.
The value area from last week remains the most important for longs to defend. If there is acceptance below the mcVPOC at 2036 we will probably see a rotation to the other side of value to 2032 at least.
My expected scenarios today are either:
1. Holds above last week's value area and trade within yesterday's range.
2. Start to rotate back into last weeks balance area with support above 2036
3. Acceptance into last week's balance and rotation lower to target the low of the range.