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Good Wednesday morning!
That was a nasty attack yesterday! The bears didn't waste any time as they started selling right from the opening bell and didn't stop until around 11:30 AM EST. At that point the market was "too short" (oversold) and buyers stepped in to 1.) lock in gains and cover short trades and 2.) traders who were looking for a pullback to buy the dip got a decent opportunity as the low yesterday was a 61.8% retracement from the January 13th low to the February 19th high! Almost a 4% pullback in 4 trading days!
I am not going to rehash all the reasons why we've been telling you the bears took over control last Friday the 21st but at this point, unless we see a confirmed close back over 6020 in the ES futures, then this narrative will remain.
This morning we are seeing another bounce just like yesterday (yes I am repeating myself) and these bounces will most likely give us an opportunity to sell into this strength (yes I am repeating that again too). The first short term target is the overnight high @ 6004 and then the next key level is yesterday's high @ 6008. If those two levels get taken out then the VERY KEY range will be the 6015-6020 area. IF the buyers take it back over that level and we get a close over that point today, then we could see more upside to come in the near term.
Now if price cannot even get above the overnight high then look for a retracement to the overnight low @ 5976 then a move lower to the POC (Point of Control) @ 5970.75. Any move below the POC could see a drop to the 5940 to 5930 level! You can see where the battle takes place today between the bulls and the bears! Futures are trading @ 5995 at the time of this writing.
VPOC Update: No new VPOC's were added or taken out yesterday so we still have 3 above and 30 below for context.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 6015 - 6020
Key Levels: 5976 Overnight Low & 6004 Overnight high
downside target is: 5940 - 5930
/NQ upside target is: 21,325 - 21,350
Key Level: 21,282 Base of Spike
downside target is : 20,950 - 20,910
/RTY upside target is: 2200 - 2205
downside target is: 2150 - 2145
Economic Data:
MBA Mortgage Applications @ 7:00 AM ET
Thomas Barkin Speaks @ 8:30 AM ET
New Home Sales @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
Survey of Business Uncertainty @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
2-Yr FRN Note Auction @ 11:30 AM ET
Raphael Bostic Speaks @ 12:00 PM ET
7-Yr Note Auction @ 1:00 PM ET
Treasury Buyback Results @ 2:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand flipped to Supply $6055-6050 with Supply above at $6110
Bullish : Sellers trapped above $6075 looking to play a break and retest from $6080 long targeting $6100 then new HOD
Bearish Buyers trapped below $6070 looking to play short from $6060 targeting $6040 then a break down into $6030s
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SPY - Key demand at $605 with Supply above at $608- 607
Bullish Sellers trapped above $605 looking to play a break and retest from $606 long targeting $608 then a breakout into $609
Bearish Buyers trapped below $605 after a break and retest from $604 targeting $602 then a breakdown into $601
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/NQ - Key demand at $21900 then below at $21750 with Supply above at $22055-65
Bullish Sellers trapped above $21900 looking to play a break and retest from $21950 long targeting $22100 then a breakout into $22200
Bearish Buyers trapped below $21900 looking to play short from $21875 targeting a breakdown into $21700 then $21600s
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QQQ Key Demand at $528-529 with Supply above at $534-533
Bullish Sellers trapped above $529 looking to play a break and retest from $530 targeting $531 then a breakout into $532
Bearish Buyers trapped below $528 looking to play a break and retest short from $527 targeting $525 then $524
Have a great day!
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