ES review & plan

Yesterday saw an inside day with value shifting higher after the FOMC announcement. This left 3 days of highs unbreached and lots of buy stops above. Volume was high on the rally as longer timeframe money entered the market after hearing from Janet Yellen that rates aren't going anyway soon....BTFD in full effect!

Overnight the market has busted through the buy stops forcing a huge covering rally. The range as at 05:00 is 2004.50 - 2036.00, up nearly 28 handles at the high. This has left air pockets on the way up in the overnight profile and we should see some back and fill after the open. The size of the gap that is likely on the open reduces the odds significantly that it will be closed today. I suspect this is a breakaway gap prior to new all time highs again.

The composite volume profile shows the HVN (green) and LVN (red) areas of interest.

Some key references from RTH profiles are:

2047.00  nVPOC 11th Dec

2046.25  POC & IBH 11th Dec

2026.25  Open & IBL 11th Dec

2025.50  High & IBH 12th Dec

2012.25  High & IBH 15th Dec

It is likely to be a frantic opening hour as this will force a lot of margin calls on shorts in stocks and futures so I intend to let things settle down and look for a long entry on a decent pullback. 2028.00 is a prominent HVN on the composite profile and has become the overnight VPOC, so this is worth watching how things balance around this level.