Monday Prep
Overnight sell off into the monthly VPOC
After last week’s data and platform fail, I’m hoping all issues are now resolved. It’s very rare I get any issues with either so was lucky not to have any positions on.
The risk off sentiment following the coronavirus outbreak has seen ES give back most of the month’s gains. Overnight action drove prices back to the Jan VPOC at 3237.50. There has been some short term support there, though ES is now trading back inside December’s range.
Friday’s settle was 3293.50 after dropping 32.50 points on volume of 2.4m. The overnight range is currently 3269.75-3235.75, gapping sharply below Friday’s low. The size of the gap makes it less likely to see that filled today (without a majorly positive news catalyst).
The two main scenarios I see that have potential for today to be ready for:
Attempt to rally through overnight range and into gap, squeezing weak shorts out before attracting new selling
Continued weakness after open, failing to break above overnight vwap and pushing down into the January VAL to find buyers
My green zones of interest for today are: 3218.25-3220.75 & 3235.50-3238.25 and red zones are 3257.00-3259 and 3268-3270. Above 3270 it’s into the gap and there may be a squeeze up to 80.50