ES review & plan
The March contract expired on the open on Friday and volume for June was up. The stock option expiry at the close pushed stock volumes to a high 5.56bn shares on NYSE (compared to about 3.3bn daily recently).
The gap up open on Friday was never closed and the brief test below the open held above the high volume 2091-92 area from Thursday. The high at 2106.75 coincided with a composite low volume node (cLVN) and closed the settlement gap from March 2nd. I also measure the 127.2% & 161.8% fibonnaci extended retracements on breakouts as high probability targets/pause/exhaustion points. (see Kam's work at www.thetradingframework.com for more info).
The late sell-off has left a poor high, which is probably a sign the market got too long in the day timeframe and there was an inventory correction into the close, with added activity in the options expiring.
There's a prominent VPOC at 2101.00 which will be important for bulls to regain control of. Acceptance below Friday's close would put the open gap in play and VPOC from Thursday. If buyers can hold above 2101.00 then the poor high from Friday and contract high are the next targets. Above there, stops could be triggered and measured moves from wave swing projections are the only targets.
The overnight range so far is 2093.25-2106.00, with the majority of trade below Friday's settle. It remains to be seen if the short inventory overnight is corrected after the open or there is more short term liquidation to go. There is Existing Home Sales data at 9am ct.
The overall context remains bullish so my most likely scenarios today are either:
1. We auction lower into the support zone and find responsive buyers and push back to the VPOC from Friday and challenge the poor high.
2. We balance between the 91.75-93.25 support zone and 2105.75-07.75 resistance zone.
3. We auction lower and initial support fails, so the open gap and next support zone is target for responsive buyers to step in.