Tuesday Prep

Yesterday's Columbus Day bank holiday volume was unsurprisingly light at just 735k. The market opened at the 2549.00 mentioned in yesterday's prep: A composite high volume node (CHVN) has formed at 2549.00 which may end up being pivotal for direction if that continues to build.

The initial negative price action after the open broke just below initial support and then remained in that zone for most the session until a late liquidation break into the 38.75-39.75 support zone. A prominent POC and VPOC had already formed before that drop, reducing the chance of continuation lower, particularly with overall volume so low. This zone represent the base of the breakout area, just above the open, on Oct 5th.

Overnight so far the range is 2543.00-48.25 versus settlement at 44.00. There's little in the way of data today ahead of tomorrows 10 year note auction and FOMC minutes. We may see some two sided balancing activity within the range of the past few days. The longer time frame remains bullish and short term we're in a more neutral/bullish phase as the market balances ahead of it's next directional move. 

I have today's initial support at 42.75-44.00 and initial resistance at 49.00-51.00. It's not a strong area of resistance, particularly as the CHVN is at 49.00 so a build above there will likely lead to another all time high and short squeeze. If, however, 49.00 proves difficult to break then this could be a sign that sellers are trying to dominate. The zones above the ATH are not hard resistance, just measured moves based on Fib extended retracements.