The first day of the month/quarter opened on a wide gap higher to the previous day’s high and settle. If we don’t see an early attempt to fill the gap then we’re more likely to see continuation in the direction of the gap. There was a break and hold above the 2936-38 zone, with volume building there and the day’s VPOC left at 2939. However, the underlying sustained momentum turned negative on the TICK quite early on, giving a warning that further continuation was much less likely (see chart above) and this had been a false breakout higher.
Once the market had broken below the vwap and vpoc, with negative underlying momentum, the gap fill attempt was back on following the liquidation break.
Overnight so far has ranged between 2917.50-30.75 versus settlement at 2930.00. There’s a prominent HVN at 2919.00 on the composite volume profile, so watch how price & order flow reacts if it gets back there
The biggest test short term for the ES in my view is if we see a move down to the 2907-08 area which is now looking weak following the multiple attempts to break it. If that area breaks we could see much more selling pile on, but again, context is key relating to price action, order flow and momentum (which is critical if using the zones)
Look out for a short squeeze higher to potentially retest the vpoc from yesterday at 2939.00 if prices hold above the 2930-31 zone. The market remains in the middle of a pretty congested area from the past week or so which means I need to be very selective and patient. Zones of interest for today below: