ES review & plan

The first hour of trade yesterday was choppy as it had opened within the prior day's value area. After pushing through the overnight high and then failing to hold above it, weak longs liquidated and shorts pushed through Monday's poor low and the target became the POC/VPOC of the 3 day balance leading up to the Fed announcement.

Volume was a healthy 2.3m contracts and 4.4bn shares traded on NYSE. The low was put in at lunch time and an aggressive 26 point bounce, no doubt fueled by short covering, briefly went into Monday's range again before falling back towards the prominent POC/VPOC at settlement. 

The short term trend remains down though the buying tail and responsive action yesterday afternoon may hint that we are transitioning into a balancing phase before a move higher again.

Again, yesterday's POC will be pivotal and if prices accept and volume builds below 1986.50, the Dec low at 1961.50 is the next objective and a high volume area on the composite profile between 1950-60.

We are close to breaking out of the downward trend line of the past week. Prices should really start to accelerate higher if buyers can hold above 2025.50. Under this we may just have a wide balancing area to rotate through and find value.

 

The overnight action has been positive so far with a range currently of 1995.75-2009.00. Eurozone inflation turned negative even on record low unemployment from Germany, increasing the odds the ECB takes more action at the next meeting. The euro has dropped to 1.1850, the dollar index continues to push higher near 92 and feb crude has made another low at $46.83.