Thursday Prep
The rally pre-market yesterday had moved ES up to open at 2503.50 versus 2495.50 settle, leaving the market long from overnight and susceptible to an inventory correction. TICK momentum was negative and the A/D trended lower from soon after the open, which was good enough reason to be cautious of using the broken resistance zones as support on the way down.
The move into initial support was the best opportunity of the day, which stayed in alignment with the overall bias and eventually led to new all time highs. A poor high was left on the profile, likely as the market had got overly long towards the close. Financials were the best performing sector on the day, as talked about in yesterday's prep.
Overnight so far, the range is a tight 2501.50-05.50, just 2 points either side of settlement. If the market can push through and hold above the 03.50-05.50 zone with momentum, volume and breadth then I would expect continuation of the trend through yesterday's highs. However, if it struggles to break this then we could see some short term liquidation to find buyers towards the other side of the current balance area as yesterday could've been a false breakout. Looking for buy responses at the support zones on a sell off but cautious if market internals are overly weak.
Zones for today below.
