Yesterday we got the balance breakout that bulls have been hoping for on decent volume of 2m contracts and 4.4 bn shares on NYSE, helped by Mario Draghi's comments regarding possible further QE which sent European yields crashing, along with the Euro.
The morning trend day saw a more than 50% pullback before continuing to the highs with very bullish internals. After hours beats from AMZN and GOOG have sustained the move.
Overnight initially balanced above yesterday's close, then has shot up on news of a PBOC cut in it's lending and deposit rates up towards the high volume area below. The range is currently 2053.25-74.50 versus settle at 2053.00.
The move is looking very stretched if it hits 2077.50, which is the 261.8% extended fib retracement of the swing from 10/21-10/22. Dips are likely to be bought and my primary expectation is for balancing at these higher prices. We're likely to open on a large gap from yesterday's 2054.00 high and 2053 settle, forcing a lot of shorts to be margin called early on. If we see a gap close I'm expecting this to be aggressively bought, though I see 2058.25 as a more likely low area where the break was overnight as seen below.