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Good Friday morning!
Markets blasted off yesterday after the CPI report and they are rocketing up again this morning. Housing starts and building permits data just came out and traders and investors like the numbers. Seems like the path of least resistance is still to the upside and we might hit the January 6th high of 6064 sooner rather than later. I don't necessarily mean today, but if not today, then maybe early next week. **And speaking of next week, the markets will be closed on Monday, January 20th in honor of Martin Luther King Jr. so your next dose of trading and of course Morning Color will be Tuesday January 21st.
At this time, futures are higher across the board on a true gap and overnight inventory that is almost 100% net long. As with all true gaps (meaning above or below the prior days range) we monitor for a "look above and fail" at the overnight high, which currently is at 6021.25, or a break below a one minute low for a shorting opportunity. The reason for this is because the overnight inventory that is net long (or short) should balance, but that is obviously not guaranteed. It could be a gap and go like we saw on Wednesday where price shot well above Tuesday's high and never looked back!
In the profile pic and key targets below, any price action that stays above 6004.25 is the most bullish scenario. We are close to upside targets @ 6015-6020 and if they get taken out then look for 6040 then 6055-6065. If sellers come in and take price back down below 6004.25 then look for the VAH (Value Area High) and then the POC @ 5985.75. If tempo and momentum continue to pick up then look for lower targets! Futures are trading @ 6018 at the time of this writing.
VPOC Update: No new VPOC's were added yesterday so we still have 4 above and 27 below. 6100 is the closest above and 5950 is still the closest below. Today's Point of Control is @ 5985.75 so let's see if that gets hit or not!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 6015 - 6020
Key Levels: 6004.25 Prior High then 5995.25 VAH then POC
downside target is: 5950 - 5940
/NQ upside target is: 21,500 - 21,525
Key Level: 21,498 Prior High then 21,424 VAH
downside target is : 21,125 - 21,090
/RTY upside target is: 2300 - 2310
downside target is: 2260 - 2250
Economic Data:
Housing Starts and Permits @ 8:30 AM ET
Industrial Production @ 9:15 AM ET
Baker Hughes Rig Count @ 1:00 PM ET.
Treasury International Capital @ 4:00 PM ET
More Color....... By Analyst Rich Rickus
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ES - Supply flipped to demand at 5950 with new supply above at $6017-20
Bearish
Buyers trapped below $5950 after a pullback below $5940 looking to play SHORT targeting $5910 then $5885
Bullish
Sellers trapped above $5950 after a break and retest above $5960 playing LONG targeting $6015 then $6030
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SPY - Supply flipped to Demand at $ 589- 588 with new supply above at $596
Bullish
Sellers trapped above $588 after a break and retest above $589 targeting $592 then $593
Bearish
Buyers trapped below $588 after a retest from $587 targeting $586 then breakdown into $585
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/NQ - Key Demand at $21100 with Supply $21400
Bullish
Sellers trapped above 21100 looking to play long after a pullback holds above $21120 targeting $21225 then a breakout into $21300
Bearish
Buyers trapped below $21100 looking to play SHORT after a pullback holds below $21088 looking to play short targeting $20900 then a breakdown into $20800
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QQQ - Supply flipped to Demand at $511-510 with new Supply above at $520-521
Bullish
Sellers trapped above $510 looking to play long from a break and retest at $511 targeting high $512 then a breakout into $513
Bearish
Buyers trapped below $510 after a break and retest below $509 looking to play short targeting $508 then mid high $507
Also Watching ...
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AAPL Demand at $227-228 with Supply at $230-231
Bearish
Sellers trapped below $231 after a break and retest below $230 playing SHORT targeting
$229 then breakdown into $227
Bullish
Buyers trapped above $231 after a break and retest above $232 playing LONG targeting $234 then $235
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AMZN Demand at $220-221 with Supply above at $225-224
Bearish
Buyers trapped below $220 after a break and retest from $219 looking to play SHORT TARGETING $218 then breakdown into $216
Bullish
Sellers trapped above $221 after a break and retest from $221 looking to play long targeting $223 then breakout into $224
Have a great day and a very nice long weekend!
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