Wednesday Prep


Most of the session was spent below the overnight low and building value below the prior day's VPOC. The failed breakdown attempt was evident with the broader market improving (see bullish divergence in A/D below) Trump gave a boost to the healthcare sector which sparked the reversal, squeezing shorts. The close settled at 2274.50, well above the 67.00 VPOC of the day.


Overnight the range has so far been 2274.75-82.00, above the 2274.50 settlement. The short squeeze could continue with the gap and single prints above. 

Overnight support at 78.25-79.75 holding after the open would be bullish and I would expect a rally to the the gap above and initial resistance at 83.50-85.75. The 90.25-91.25 resistance zone could bring sellers back in, though if that breaks I would expect new highs again. If overnight support fails then I would expect the next two support zones to see buyers step in. If 68 breaks then this has reversed yesterday afternoon's breakout and caution needs to be taken on longs.

FOMC later this afternoon so we may see the market in the doldrums until then after an initial short squeeze possibly.

Today's adjusted zones below: