ES review & plan

The big move lower overnight yesterday had the market heavily short going into the open and with a gap lower still not filling the gap higher from NFP day, this left a vacuum to fill. There was a push for the overnight low after the open but selling pressure was not strong enough and the market then moved higher into the gap and a short covering profile formed for the rest of the session, filling the gap. Volume was 1.4m contracts, with increased overnight activity driven by the European moves lower. NYSE volume was light at just 3.1bn shares.

Bonds were in the driving seat again yesterday and the big sell-off overnight reversed and gave support to equity markets.

Overnight the range is currently 2095.75-2105.25 versus settlement at 2095.00 with trade dominated by a raft of Eurozone data. The market has been stuck in a 90 point range since the end of Feb and volume has remained low, along with general confidence, as the market attempts to normalise and adjust to real economic data as opposed to being inflated by the Fed via QE. Retail sales are due at 7.30am ct, expected at 0.2% month-on-month (0.4% ex autos & gas). 

There remain weak highs above at 2013.50, which if broken should lead to a rapid challenge for the all time highs again. Failure below initial support at 2095.75-98.25 could see sellers take short term control again to test the lower zones.