ES review & plan

Volume was good again yesterday at 2.3m contracts and 4.1bn shares on NYSE. The prior day's impulsive move lower did see a slight extension lower but overall the day was balanced and the VPOC/POC higher than Monday's. The day's high fell just short of the 1990.25-1992.75 bull/bear zone I was using yesterday

Overnight has seen a strong rally with a range of 1871.50-1900.25 so far, versus settlement at 1874.50. We are likely to see a short covering P shaped profile with the market opening above yesterday's range and potentially staying above the 1897.25 breakdown level (09/24 low). This could lead to a move up through Monday's single prints (1901.75-1911.75) and potentially to close the settlement gap from Friday. Failure to hold above the 1897.25 level may see a re-test of yesterday's prominent POC at least.