Wednesday Prep
Yesterday opened at 2567.50 and briefly touched the front of the B/B zone before moving down to test the prior settlement and vpoc at 63.50. There was no follow though and a poor low was left followed by a squeeze up to the top of the B/B zone. Underlying stock momentum was weak, however, and again there was no follow through to the upside this time.
Overnight so far the market has tested the bottom of the 60.50-62.25 zone with the current range 60.50-67.00 versus settlement at 67.25.
Yields have jumped across the treasury curve overnight with a bounce in the dollar and some key technical levels being breached.
I've kept the zones the same as yesterday. Clearly the more the 60.50-62.25 zone (IS) gets hit the weaker it becomes and the more likely we see the market auction down through to the other side of the current range, though I would still be looking for reactions at the lower zones (dependent on market state/context).
If IS holds we may just see balancing again between there and the B/B until one side can dominate. Above the B/B we have zones where sellers are likely to step in, though against the larger trend. We also have an all time high made in the electronic trading hours (ETH) which has always previously been tested during regular trading hours (RTH)
There is poor structure below the swing low at 42.50 from last Thursday down to the 2507.75-09.75 breakout zone, so in the event of a move holding below 42.50 things could get ugly fast for longs (not that i'm expecting that today, but that's the point, it's when you least expect it sometimes).