Wednesday Prep

The slow drift higher continues on falling volume, with a pitiful 836k contracts trading yesterday. Sellers failed to break lower leaving a 1-tick failure after leaving a 4 TPO wide ledge at the initial balance low (IBL). 

With initial support holding there was a move up to the overnight high and eventually a break above extending to a new all time high at 2533.00. The Russell 2000 also made new highs, though the Nasdaq 100 is still attempting to regain the high made Sept 1st.

This low volatility, low volume market will not stay the same indefinitely. When most of the shorts are squeezed out and everyone's long, we're going to see a correction as the market auctions lower to search for buyers. The 2509.25 breakout point would be a key area to test initially in my view (see top chart highlighted with yellow box). However, until there's market action pertaining to that, all time frame trends remain bullish.

Today's ADP report could give some pointers towards this Friday's hurricane affected September employment report. Janet Yellen is due to speak later, though is only delivering opening remarks at a conference. 

Overnight so far the range is 2530.75-33.25 on extremely light volume (versus settlement at 32.75)

The adjusted zones are below for today. 29.00-29.75 is an aggressive area of support. If we open and move higher to fail at the overnight high then a revisit of yesterday's poor low could see buyers respond in the 23.50-25.50 zone. If there's strong downward momentum, volume and market breadth then this could trigger some short term liquidation into the lower zones. On the upside, 33.50 marks a 161.8% ext. fib level on the daily chart but there is no hard prior resistance just more buy stops getting triggered from recent shorts.