Review & Plan Feb 4th

Yesterday was a wild ride from both sides. The expectation going into yesterday was that shorts would take control at the 1908-10 zone down to the low of value of the range last week (1871-3). I certainly hadn't anticipated it happening in the first hour though!

The morning low took out the RTH low from Jan 28th and came back into range. then rallied for the remainder of the session, eventually taking out the overnight high. Volume was high at 2.84m contracts and 5.14bn shares on NYSE. 

The added volatility was helped by the big moves in rates and the dollar yesterday. The dollar sold off hard as yields continue to get squeezed with the global currency wars hotting up, which in turn had a positive impact on commodities.

Overnight the market has attempted to hold above last weeks range, which sets the scene for more potential short covering. The distribution areas shown above will be useful today to see who's in short term control. The prominent VPOC at 1906.25 has given support overnight with the range currently 1897.75-1922.25 versus settlement at 1908.50

Bias today is going to be very dependent on the 1906.25-09.00 micro bull/bear. Zones and anticipated moves/reactions below:

Potential Support:

1896.50-98.50  Yesterday afternoon pullback area

1889.25-92.50  Breakout area yesterday/distribution LVN and mcVPOC

1871.50-73.75  mcVAL and pullback area yesterday

1849.50-52.25  Composite low volume area and Jan 26th low

Potential Resistance:

1906.25-09.00   Prior VPOCs and settlement, micro bull/bear

1918.75-22.25  mcVPOC and overnight high

1931.00-33.00 Bull/Bear zone