ES review & plan

The open was below the prominent VPOC/POC from June 9th and rejected it quickly on the inital tick up after the bell. There was then a drive to test the low of that day, which was a one-tick move below and then came back into range as strong positive cumulative delta divergence was evident (see below). Shorts were forced out above the initial balance high and a P shaped profile was formed, normally associated with short covering action.

Overnight so far the range has been 2062.00-75.75 versus settlement at 2075.50 with inventory is net short. Housing Starts are at 7.30am ct and headlines continue to be dominated by the Greek endgame. The FOMC statement is tomorrow, CPI Thursday and quad witching on Friday so important not to get married to a view on the market as we could see wild swings either way.

I'm using the zones as potential engagement/target areas depending on context (sentiment, auction process, order flow etc.). The 61.50-63.25 zone has been tested a few times now during globex which increases the odds of it failing on a test again. This could see a flush down to the 53.50-55.50 zone. Above the overnight high, shorts could receive continued pressure and an attempt by longs to close the regular trading hours gap above, and see a push to the 81.50-83.50 zone. Ahead of tomorrows announcement we may just see two-sided trade.