Thursday Prep

Opening inside the 2810.50-13 zone yesterday, there was a quick tag of the prior vpoc and prices shot lower with underlying stock weakness (see NYSE TICK & Advance/Decline above). The ‘back & fill’ of the prior day’s single prints completed in the first 90 mins stopping to the tick at the prior day initial balance high, where the big breakout started. The dip buyers and short covering managed to rally price back to settlement before a choppy wait ahead of the FOMC minutes then some 20 point swings into the close. The potential for breaking out above the 17.75-19.75 zone looked limited because of the still quite negative A/D.

Overnight so far the range is 2800.25-17.50, within yesterday’s afternoon range and versus settle at 2816.25. Short term remains range bound following an upside breakout after a much bigger selloff. The breakout gets invalidated for me if prices hold below yesterday’s low and then we could see a move towards the recent lows. Until that happens we either remain in this breakout range and/or attempt to push and squeeze higher.

Zones I’m watching today on the split overnight/RTH profiles: