Monday Prep
Friday's strong jobs report combined with subdued wage growth sparked a strong, straight up rally all day leaving a lot of weak structure in its wake. Any positioning ahead of the release for a sell-off was aggressively squeezed out and forced to cover.
This rally has continued overnight breaking above the last swing high on Feb 27th and is currently moving up towards the major breakdown area (see circle below) from Feb 2nd, which is nested below January's VPOC and the Feb high. This is a key area where I would expect sellers to step in on first test. A break and hold above the 2843.25 Feb high changes the medium term outlook to bullish from neutral. With more supply in the 10 and 30yr auctions plus CPI, Retail Sales and PPI in the first half of this week, there are some potential headwinds..
The overnight range is currently 2788.00-2805.25 vs 2788.75 settlement (ESM8). Acceptance back inside Friday's range could see some late longs liquidate and push down into the single print areas pointed out on the above chart. Consolidation of the move is more likely in the absence of any market moving news.