Friday Prep

The market opened at 47.50 after trending higher overnight from the 35.25 low. This was an area sellers had defended the previous day and buyers failed to break, as seen in the triple TPO top. Momentum wasn't supportive on the break of the overnight high and we got a long liquidation break and failure at the initial support zone. Trade then ranged between the bull/bear and initial resistance zones, with value building below the prior day's.

There's still an open gap in RTH which I'd expect to fill at some point when the bull/bear zone fails. For now it has held and 58.00-60.50 is the next key zone to test above, which includes the breakdown area and open from last Thursday. For that rally we'd need to see a rejection of yesterday's value after the open or else there's potential for a rotation lower if it can't hold above prior value.

Overnight so far the range is 2437.50-45.50 versus settlement at 40.75.

The weekly volume profile with today's zones below shows value built above the bull/bear zone, which keeps the bias neutral/bullish, as it is still within a larger range. If we do see broad market strength, size and momentum on a rally then I would see the 63.25-64.25 zone as a potential upside target extreme today, though still looking for sellers response at the zones below there.

On the downside, acceptance below 35 means a possible shift in sentiment and we could see a heavy liquidation break depending on market state.