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Good Wednesday morning!
Well the downside playbook was the big winner yesterday and all you had to do was pay attention to the key levels listed and they should have helped you in your operations yesterday! First we talked about....
"If price gets below the lower targets of 5630-5620, then we could see further downside to 5594 then 5569. "
Well price in the /ES futures opened at 5630 and NEVER went higher during the trading day yesterday. That was a big tell!
SIDE NOTE: Now please don't misunderstand me...I had NO IDEA whether the bullish playbook or the bearish playbook was going to win out yesterday because I am not in the prediction game.....It's a fools errand......BUT, what I do know is looking at key levels then acting when those levels get taken out (either up or down) and then trying to get on the right side of the trade, that is what to look for each day. It's all about giving you scenarios to watch for as you trade the markets!
So please know that is what we are trying to help you with every day!! Again, I did NOT say we were going lower (or higher) but I did give you key lines in the sand, and then both upside and downside targets, and it just so happens that sellers won the day and the downside targets were hit!!! Even if you did not get short, if you did not get long the market because of what you saw, it probably saved you big losses! Again I don't have a crystal ball but if you watch and pay attention to key zones it should help you day by day!!
Secondly, as mentioned several times over the last few days, the markets were operating in a large trading range in the S&P Cash of almost 100 points! Remember, the range was 5650 to 5560. The fact that the downside was taken out was also a big tell!!! If we had stayed above 5630 in the /ES and gone higher and taken out 5650 to the upside in the S&P, we'd be having a very different conversation right now!!! But the sellers overwhelmed the buyers so the bears won the battle yesterday!!!
Futures are lower this morning on overnight inventory that is 100% net short, and while price did get below prior days range, we have moved back above yesterday's low of 5516.75. If buyers step in and take out the overnight high and the top of the spike, which you can see in the profile pic below, then there could be some more short squeeze coming so be on the lookout.
In the profile pic you can see the POC and overnight high listed as key levels. The reason these are important is that if buyers come in and price starts to move higher (as I've previously stated) then those who are short will lose their profits and will start to cover. When you have natural buyers AND traders/investors who also have to buy to cover their short positions, this can lead to sharp moves higher!! Again I am NOT saying this will happen with 100% certainty but it is something to look out for in today's trade!
VPOC Update: Because of the persistent selling pressure, a new VPOC @ 5659.25 was added above prices yesterday so now we have 2 above and 21 untested points of control below current prices. The closest one below is 5468 so make a note of it for a future target!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5590 - 5600
Key Levels: 5543.50 - 5541 POC & top of single prints/overnight high
downside target is: 5500 - 5490
/NQ upside target is: 19,290 - 19,340
Key Level: 19,006 top of single prints/overnight high
downside target is : 18,900 - 18,850
/RTY upside target is: 2170 - 2180
downside target is: 2130 - 2120
Economic Data: Light Key Data Today!
International Trade in Goods and Services @ 8:30 AM EST!
JOLTS @ 10:00 AM EST
(Job Openings & Labor Turnover Survey)
Factory Orders @ 10:00 AM EST
*FED Beige Book @ 2:00 PM EST
(*the Beige Book is a read of the 12 FED districts across the US)
More Color....... By Analyst Rich Rickus
/ES - Demand $ $5507-5500 with Supply at $5570 then at $5600
Bearish
1. Buyers trapped below $5570 and holding below after a pullback below $5565 looking to play SHORT targeting $5539 then $5510
Bullish
2. Sellers trapped above $5580 looking to play long targeting $5600 new HOD
SPY - Demand $548 w / Supply at $554-553
Bullish
1. Sellers trapped above $555 where Supply flips to Demand looking to play long from $556 targeting $557 then $558
Bearish
2. Buyers trapped below $554 after a retest from $553 targeting $551 then new $549
/NQ Key Demand at $18825 with Supply $19242 then at $19080
Bullish
1. Sellers trapped above $19080 looking to play long targeting $19150
Bearish
2. Buyers trapped below $19000mand holding , looking to play short targeting $18875
QQQ Key Demand at $457-458 with Supply at $464-465
Bullish
1. Sellers trapped above $464 after a break from $465 I want to play long targeting $468 then $469
Bearish
2. Buyers trapped below $464 after a break and retest below $463 looking to play short targeting $461 then $460
NVDA - Key Demand at $104-105 with Supply above at $119-117 then at $112
Bullish
1. Sellers trapped above $112 after a break and retest from $113 where previous Supply flips back to Demand playing Long targeting $114 then $116
Bearish
2. Sellers trapped below $112 after a break and retest from $111 playing short targeting $109 then $107
META Key Demand at $499-501 with Supply above at $516-515
Bullish
1. Sellers trapped above $499 after a sell off and pullback holds above $501 looking to play Long targeting $503 then $505
Bullish
2. Buyers trapped below $516 after a retest and hold below $515 looking to play Short targeting $512 then $510
SOXL - Key Demand at $25-26 with Supply at $33-34
Bearish
1. Buyers trapped below $34 after a false breakout looking to play short after a retest hold below , from $33 targeting $31 then $29
Bullish
2. Buyers reclaim support above $33 liking to play long targeting the $35s then $36.40
Have a great day!
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