Wednesday Prep

The early part of the session yesterday saw a test of the overnight high and reverse lower to 2924 before a short squeeze back to the 2930-31 zone. There was a weak attempt higher, as can be seen in the neutral TICK and negative cumulative delta. This led to a collapse in price and retest of the day’s low late on, before a reversion to the mean (vwap) into the close. The day finished inside the prior day and left with a poor high and low. VPOC and settlement was at 2928.50.

Overnight so far, the range is 2925.75-40.00 so far, close to Monday’s high of 2942.00. Longer time frames remain bullish and short term has been more neutral though is close to breaking out higher once more. Fundamentally I think we’re in for a serious correction, but I have to ignore this when trading intraday and just follow the flows and momentum as they are at present. Until there’s more evidence of a breakdown, I would expect pullbacks to be bought and continuation higher. I mentioned the 2707-08 zone yesterday which I think is pivotal to any potential breakdown.

Zones of interest for today below. The all time high is at 2947.00 - a lot will depend on the underlying strength if it gets there today, though a forced short covering could see a spike leading to a false breakout.