ES review & plan

Yesterday saw a very similar pattern day to Friday forming a long liquidation b shaped profile. Volume was 1.6m contracts, which is above average, but the underlying NYSE composite volume was just 3.3 bn shares, which shows a lack of participation from the longer timeframe.

On the open the brief rally stopped a tick under Friday's initial balance low and the target then quickly became the overnight low and open gap. There is a spike above 2029.25 which is bullish if the market opens and holds above, particularly if it moves back into Friday's RTH range. If the open is within the value area formed yesterday we may see choppy trade and a test of the lows. The fact we have moved sharply lower on declining share volume is a clue we have possibly finished this short term liquidation and removed a lot of weak hands from the market.

Crude continues to sell off overnight ($44.21 low) but the indices are not following. The dollar, bonds, equities and gold are all higher. There is the JOLTS report at 9am ct, the Fed's Plosser and Kocherlakota give speeches and there is a 10 year auction at midday.