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Good Tuesday morning,
We hope you had a great holiday weekend but here's the big rug pull my friends! This is the gap that is going to start the new downtrend, and I don't know if this is going to last a week, a month or several months, but for now get ready to play defense! That means taking profitable longs off of the table, putting on hedges, or getting outright short!
📊 In the profile pic and key levels below, you can see the big gap lower, well below Friday's range, and now this is going to change the game. Volatility is exploding and people are hiding out in gold. Bonds are dropping and yields are rising. Unless buyers somehow can take price back into Friday's range above 6,455, then expect lower prices to come! Since we have a true gap lower and overnight inventory net short, there could be a fade higher to balance out the overnight inventory. Look for a "look below and fail" at the overnight low at 6,387.25, or if that level is not taken out once the opening bell rings, the look for a long over the first one minute high. If downside targets get taken out at 6,370-6,360, then look for 6,352 then 6,326!
Futures are currently trading at 6,395 at the time of this writing.
🧭 VPOC Update: Our new VPOC at 6,456 was taken out Friday, so we are now back to none above and four below the current price. With today's large gap lower, there is a high probability we put in a new VPOC above us at 6470.50.
Current VPOCs:
- 6,264.50
- 6,146.00
- 6,091.00
- 6,050.00
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 6,440 - 6,450
Key Levels: 6,455 Prior Day Low
downside target is: 6,.370 - 6,360
/NQ upside target is: 23,300 - 23,325
Key Level: 23,397 Prior Low
downside target is : 22,950 - 22,900
/RTY upside target is: 2,355 - 2,365
downside target is: 2,315 - 2,305
Economic Data :
PMI Manufacturing @ 9:45 a.m. EST
ISM Manufacturing @ 10:00 a.m. EST
Construction Spending @ 10:00 a.m. EST
More Color By : Rich Rickus
Have a great day!
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