Wednesday Prep

A quick look at the monthly, weekly and daily charts above puts things into context and as we can see from yesterday’s move on the daily, the market tested the lowest volume area at the bottom of the major volume distribution on the composite profile.

Yesterday’s open at 2715.50 was a 41 point gap below the prior settle. In yesterday’s note I stated: If there’s an early move back to the overnight vwap in the first hour, it could be telling whether that holds or not to the ongoing action. The 24 hr vwap was at 2723.25 at the open and the initial move higher stalled and reversed at the vwap to make the eventual lows on the day. The heavily short and extended move got aggressively bought for the rest of the session and eventually closed the range gap from Monday. Volume was heavy at 2.8m contracts.

Overnight so far the range is 2719.25-50.00 versus settle at 2746.25. The in-range composite high volume node (CHVN) is at 2728.00 which could become a magnet on a failed move higher towards the 2750-52 CLVA. Pushing through and holding above 52 puts 71 as next target. Failure for 2728 to hold puts yesterday’s reversal into question and could trigger a liquidation move lower.

Zones of interest for today below: