The early attempt to move higher through the overnight high failed after the open and sellers dominated from then on. Volume was 1.7m contracts in ES and NYSE volume was just 3.5bn shares, much lower than you would expect after such a big move.
I hadn't included a trending down day in my expected scenarios so I had to abandon those as market generated information became more clear. Although market internals were not particularly negative early on, the futures cumulative delta was on a downtrend from the off giving some warning signs to at least not catch the falling knife while the market took back the move on FOMC day going through yesterday's bull/bear zone. The close was heavy and near the lows as you would expect on a trend day. If we do see a move back up, there is a spike above 2069.75 which could trigger some aggressive short covering.
Overnight has continued the steep downtrend towards the bottom of the last month's range. Trade has currently been between 2033.25-2056.50 and looking short term exhausted. However, if the market breaks and holds below the 2030.50 swing low we may see continued liquidation, but there is also potential for a stop run and failed breakout.
Bullard and Lockhart are speaking todayand Jobless Claims are at 7.30am ct.
Expected scenarios for today are either:
1. We test the overnight lows and responsive buyers step in to trade back to last night's close and the market trades between these support/resistance zones.
2. Responsive buyers take out near resistance and target the prior VPOC area
3. We test the 2030.50 swing low and either continue liquidation lower or have a failed breakout and come back into the overnight range.
The market is already very short in the overnight session so we may see a correction to overnight inventory into the open. If we don't this is obviously negative and increases the likelihood of further downside.