Tuesday Prep
From yesterday's prep: There remain weak highs above which have a good chance of being taken out if the 72.50 level can hold, which is a composite high volume node (CHVN).
The market opened at the 72.50 CHVN after overnight attempting to force out some weak longs. Once open, shorts were trapped below the initial support zone from overnight and we saw a spike higher in the first 30 mins as seen on the profile chart.
Also from the prep: On the upside we still have the IR zone at 78.00-79.50 which if broken becomes support, as we saw on Friday.
We can see this is exactly what happened after the initial blast through the IR zone, with the pullback into it giving another buying opportunity for both new longs and covering shorts. Having rejected the overnight low, the target became the overnight high after taking out the weak high from Friday. As is often typical with a short covering day, we had a P shaped profile formed.
Overnight so far the range is 2575.25-82.25 on light volume. I'm using 77.25-79.25 as the short term bull/bear zone. Above there, the all time highs are back on the cards with some expected responses at the red zones shown.
If that zone doesn't hold then yesterday's low comes back into target in the 70.25-72.50 zone. We could see a buy response of the 67.25-68.25 and 62.00-63.50 zones, which were launching areas from last Thursday. Acceptance below there traps the recent longs and we could see a liquidation break. Also from yesterday: This month's low is at 62.25, which if broken puts last month's VPOC/POC and mid point into play at 2549.00. If the market begins to accept below that level risks derailing the bull in the intermediate time frame and we could finally get a move lower to retest the breakout from the 2504-09 area.
Monday Prep
Very slow day on Friday with trade remaining between the initial support and resistance zones for most of the session. Underlying stock momentum was weak so when there was an afternoon break above IR, there was little follow through.
Overnight so far the range is currently 2584.50-71.00 versus settlement at 79.50, having sold off from the highs all morning. There remain weak highs above which have a good chance of being taken out if the 72.50 level can hold, which is a composite high volume node (CHVN). There is PPI data due tomorrow and CPI and Retail Sales on Wednesday, Industrial Production on Thursday.
Weakness below 72.50 could trigger some short term liquidation. This month's low is at 62.25, which if broken puts last month's VPOC/POC and mid point into play at 2549.00. If the market begins to accept below that level risks derailing the bull in the intermediate time frame and we could finally get a move lower to retest the breakout from the 2504-09 area.
On the upside we still have the IR zone at 78.00-79.50 which if broken becomes support, as we saw on Friday. If we are seeing positive moves with the NQ and TF at the same time along with underlying positive momentum and volume, the weak all time high could be challenged again this weak. However, the market is in more of a neutral state with both sides active and looking to dominate short term. The long term trend remains in bull mode for now.
My zones of interest for today are below:
Friday Prep
A reminder of yesterday's prep: At the moment this just looks like an other side of range test after a failed breakout. The market has been in a balanced state this week and until we see aggression below this weeks low I'd expect a buy response to push prices back towards value. However, there'll be more overhead resistance to expect on a move back up. Holding below 75.50 puts the month's low at 62.25 into focus as the next range extreme, where a buy response would be expected on first test.
Once the overnight low was broken through mid-morning, which was also the re-test of the weekly low at that point, there was a break down towards the 62.25 monthly low (62.00-63.50 zone). This range extreme saw selling pressure abate and buyers step in, eventually squeezing shorts out and pushing back up into the week's value area and POC/VPOC.
Overnight we've seen a sharp move lower in bonds with accompanied weakness in stocks. The range is currently 2571.50-85.75. I have initial support at 72.50-74.25 today and failure to hold that puts yesterday's lows at risk and room for a breakdown below there the more that area is tested (49.00 next downside target). The 41.50-43.00 zone is a key area of longer time frame support which if broken has little structure below until the 2504-09 area, where the end of Sept breakout started.
Above, I have the initial resistance zone at 78.00-79.50. The 83.50-86.00 zone is key for shorts to hold or risk a squeeze back up to fill the 91.00 settlement gap from Weds/Thurs. It's worth bearing in mind we still have a weak all time high at 94.50 which has not yet been tested during the RTH session. The weekly and monthly trends remain bullish for now until proven otherwise, with the daily in neutral territory.
Zones for today:
Thursday Prep
Weakness in the Russell was weighing on the ES in the morning but it failed to test the prior day's low. Once back above the prior day mid, buyers dominated a formed a double distribution closing near the high.
Overnight in Asian time there was a push to new highs but this was a failed breakout. There has been a push down to test the low of the week at 75.50 which has so far seen responsive buyers step in. The range so far is 2594.50-75.50. At the moment this just looks like an other side of range test after a failed breakout. The market has been in a balanced state this week and until we see aggression below this weeks low I'd expect a buy response to push prices back towards value. However, there'll be more overhead resistance to expect on a move back up. Holding below 75.50 puts the month's low at 62.25 into focus as the next range extreme, where a buy response would be expected on first test.
Wednesday Prep
Yesterday's overnight market had made another all time high at 2593.50 and once the cash market opened there was a push up to test this level which was quickly rejected. Underlying stock momentum was neutral on the first move up and quickly turned negative. The Russell was leading the downside of the major indices.
Overnight so far the range is 2579.75-87.50. There's very little economic data due, though the EIA report at 09:30 CT could have an impact following crude's big rally over the past few days. There's also a 10 year note auction due at 12:00 CT.
Zones of interest for today are below. With the market in a more neutral state short term I'm expecting more two sided trade. If the 79.25-80.75 zone fails to hold then sellers will be targeting the 72.50 CHVN initially. A push above the initial resistance zone could still see sellers defend the zones above.
IR 2586.75-87.50
IS 2582.25-83.75
Thursday Prep
Apologies for the break in notes, I'm currently travelling and don't have access to my charts etc. I'll be back on Tuesday 7th Nov with the next update.
Good trading to all!
Wednesday Prep
A very slow and balanced session on overall low volume of less than 1m contracts, though there was very concentrated volume of over 350k at 72.25-75.
This has been a foothold to launch from in the overnight market where the current range is 2571.00-84.00, making yet another ATH, along with Nasdaq & Dow with the Russell still catching up.
Broken resistance zones become support and all time frames are on the bull trend ahead of today's FOMC meeting and after a strong ADP employment report.
Today's zones of interest:
Tuesday Prep
After Friday's pop to new all time highs, we got some minor liquidation yesterday which balanced below the overnight low for the majority of time. The initial move up from initial support fell short by 1 tick of the prior VPOC and initial resistance zone. Underlying stock momentum was weak throughout the day (see NYSE TICK) and failure to regain the overnight low were cautionary signals on longs. There was a quick move below Friday's open (66.50) which was quickly reversed. Failure to hold above there puts the continuation of the bullish trend back into question in the short term. Long term remains bullish and we'd need to see a break and hold below last week's low before there's any risk of that changing.
Zones of interest for today are below. Acceptance below the 65.50-66.75 zone is a sign of short term weakness, though we could still see reactions at the zones below. I would also expect selling response at the resistance zones marked, though this would be against the long term trend and caution is needed if momentum and volume is behind a rally.
Monday Prep
Going into Friday's open, the short term trend had come back into line with the long term bullish trend. Overnight value had built overlapping higher to the prior day.
Opening at 2566.50, there were a couple of tests of the initial support zone. Once the market broke higher, through the overnight high at 69.25, there was a reaction at the 71.75-72.50 resistance zone which gave a pullback into the overnight high once more (see above circled).
Forcing action through the initial balance high left single prints until a new all time high was made (2580.75) and the market balanced at higher prices for several hours into the close. There's a small selling tail left on Friday's profile showing some sign of excess.
Overnight has balanced in the area that didn't trade much on Friday, ranging so far between 2571.75-78.25 versus settlement at 78.50.
We may get some balanced trade today and retesting of breakout areas from Friday - zones of interest for today below
Friday Prep
Yesterday's overnight market had balanced within the upper third and initial balance of Wednesday's relatively wide range day.
Initial resistance was broken briefly mid-morning with a tag of the prior day's high, but there was no follow through. It was a very range bound balanced day until a late break down to IS bouncing quickly back to IR and the VPOC at the ETH close.
The GOOG, AMZN, INTC, MSFT earnings beats after hours have kept the buyers in control overnight. The range so far is 2557.50-69.50 versus settlement at 61.50.
Zones remain the same as yesterday, as below. Overnight has already hit the 69.00-70.25 Initial resistance zone. Short term trend is back in line with the larger time frame again, and we'd need to see yesterday's low taken out with acceptance below before this changes.