Thursday Prep

Yesterday's open at 63.00 gapped below the prior day's low and close and the initial drop into initial support was bought and the range gap was closed. Sellers stepped in at initial resistance and there was an attempt to push down into the key 57.00-58.75 range extreme support. The market reversed 1 tick above the prior day's low and left a buying tail in the first 30 min period. Extension higher above the initial balance increased the likelihood of continuation higher, though underlying stock momentum was weak for most of the session.

The last hour was strong with a 10 point rally closing near the high at 73, just above the prior day's 72.75 close. 

A look at the RTH split profiles above shows a textbook type  pullback after an impulsive move lower with a 50% retracement of the move and an A-B-C swing corrective swing of equal lengths.

Overnight has sold off from the open back down into the low volume edge of the current range. I've highlighted the range and balanced volume distribution. Further pressing into the 61 area could see a move to test the 57 swing low. If that breaks sellers will have control and I'd expect an attempt to move down to the 35.50 HVN if there's enough participation behind it.

On the upside, the 66.75-67.75 initial resistance zone is key for short term longs to break and hold above. If they can then a retest of the overnight high and potentially to the 77-78.25 zone. However, if buyers can't break IR then I'm expecting a retest of yesterday's lows and potential bearish break below 57.

Today's Zones: