ES Review & Plan
Another day, another all time high! Draghi's hint at opening up the war chest sent European markets higher and helped maintain a bid to the ES. The dollar index hit new highs and bonds fell, along with continued weakness in the energy complex and precious metals.
The market opened within Wednesday's range, after making a new high in Globex and pulling back from a measured range extension move at 2025.75. The overnight inventory was net long and after a brief look above the prior high, weak longs liquidated and shorts targeted the overnight low at 2012.25. There was little interest below that level and after matching the lunchtime pullback low from Wednesday, buyers regained control back up through the open and then a slow grind higher for the rest of the session leaving value overlapping higher.
Futures volume was low at 1.4m contracts, which has been the average for the entire week. This is half of what we saw on the big down move.
Overnight in the Asian session prices have drifted higher. The employment report and Janet Yellen speaking today are going to be market movers and increase volatility. There's a lot baked in to this rally already but it continues to one timeframe higher on a daily, weekly and monthly basis. The next measured move is at 2034.00 to watch for any reaction. The low volume, volatility and absence of fear mongering headlines is unlikely to remain for long, leaving the market susceptible to a sharp break. Any acceptance below 2010.00 should see the 1990-80 region revisited.
