Friday Prep

A reminder of yesterday's prep: At the moment this just looks like an other side of range test after a failed breakout. The market has been in a balanced state this week and until we see aggression below this weeks low I'd expect a buy response to push prices back towards value. However, there'll be more overhead resistance to expect on a move back up. Holding below 75.50 puts the month's low at 62.25 into focus as the next range extreme, where a buy response would be expected on first test.

Once the overnight low was broken through mid-morning, which was also the re-test of the weekly low at that point, there was a break down towards the 62.25 monthly low (62.00-63.50 zone). This range extreme saw selling pressure abate and buyers step in, eventually squeezing shorts out and pushing back up into the week's value area and POC/VPOC.

Overnight we've seen a sharp move lower in bonds with accompanied weakness in stocks. The range is currently 2571.50-85.75. I have initial support at 72.50-74.25 today and failure to hold that puts yesterday's lows at risk and room for a breakdown below there the more that area is tested (49.00 next downside target). The 41.50-43.00 zone is a key area of longer time frame support which if broken has little structure below until the 2504-09 area, where the end of Sept breakout started. 

Above, I have the initial resistance zone at 78.00-79.50. The 83.50-86.00 zone is key for shorts to hold or risk a squeeze back up to fill the 91.00 settlement gap from Weds/Thurs. It's worth bearing in mind we still have a weak all time high at 94.50 which has not yet been tested during the RTH session.  The weekly and monthly trends remain bullish for now until proven otherwise, with the daily in neutral territory.

Zones for today: