Wednesday Prep

The market opened again at the CHVN, 2549.00. After the first few minutes of pushing against this area there was a fast squeeze through there to new all time highs and hitting the 53.25-53.75 zone (127.2% ext. fib of recent daily swing).

There was little underlying follow through after the buy stops had been triggered and the market collapsed on itself, more from a lack of buyers than heavy underlying selling. This move tested the 42.75-44.00 zone (which represented 1 tick below the overnight low to the prior initial balance low). The second test of the zone showed a 1 tick failure of the overnight low and initial balance low which then trapped shorts and eventually led to a move back to the CHVN at 49.00.

The fact that many of these levels are being responded to so much at the moment is indicative of short term players dominating. Volume finished at 1.1m contracts.

The daily profile from yesterday now shows we have excess at the all time high and a series of poor lows and untested VPOCs/POCs. Although the long term bias is still clearly bullish, the risks are increasing of a correction. The downside target for that move would be the 2509.50 breakout point from the end of Sept. However, depending on the strength of any move we are still looking to see responsive buying at the zones ahead of that. This will be market state/context dependent. The FOMC minutes later today and data for the rest of this week are important for market sentiment. 

Yesterday's stock moves showed defensives leading the day - not a great sign at an all time high.

Today's zones of interest: