ES review & plan
Yesterday opened within the prior range and saw a rapid drive higher to test Wednesday's value area high. This was met by aggressive selling/liquidation and the next objective became the overnight low at 2067.25.
The move lower could have been seen as a false flag in my view as value over the previous few days was shifting higher. The main concern with the move into 2067 again was the number of times that area had been touched, which increases the likelihood it would break. However, a good low was left on the profile and aggressive buying pushed back up to balance around the overnight high for some time before a late push through Tuesday's high. Value was left overlapping higher on the day so odds favour a continuation of the move. Longs will want to remain above the low of the late higher distribution, at 2082.00.
Overnight so far the range is 2083.00-2089.50. There are no tier 1 economic announcements due, but Fed speakers on the wires today are Lacker & Kocherlakota. The dollar index is pushing back towards 100, helped by the jump in yields yesterday following the 30yr bond auction.
My expected scenarios today are:
i) There is a test lower to find responsive buyers and we see imbalance higher to test resistance. The composite volume profile VPOC is at 2084 and the 2094 area should be the next upside target (composite LVN) after breaking through 2089.25 resistance.
ii) The move higher is met with responsive selling at the 2089.25-91.25 zone, and a combination of liquidation and short selling pushes prices back into the balance area of the past few days.
iii) The least likely but still possible I think is for ii) to happen with a break down through 2067 and further liquidation