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Good morning everyone,
Looks like bright sunny days are over for the bulls (for now) and storm clouds have rolled in.
Ever since last Friday morning when we called for the short side in the markets, the SPX has been down almost 200 points, the NASDAQ and NDX shed approximately 600 points while the RUT (small caps) almost 100 lower. We have seen value build lower for 3 straight days and we are still one time framing to the downside. Further evidence also shows us this fact as we put in another new VPOC above current price at 4787.75
Futures are mixed this morning with overnight inventory actually net long, however, that is quickly changing. Both the /ES and /NQ futures have seen more selling pressure coming in with the /NQ futures (large cap tech) getting punished the most making news lows as of the time of this writing down 70 points. DOW futures are actually higher as buyers step into energy (XLE) and financials (XLF). If the overnight lows hold and buyers flip back to demand, watch for a break over the 4750-55 area as that would put prices back over the overnight high, POC and yesterdays halfback levels. This could bring in some short covering then look for upper targets. If we do stay under selling pressure, the lower target in the /ES coincides with a "spike" from the FED meeting back on December 13th. (see image below)
/ES upside target is 4775-80
downside target is 4710-15
/NQ upside target is 16,655-675
downside target is 16,430-440
/RTY upside target is 2000-02
downside target is 1955-58
Economic Data Today:
ADP Employment Report @ 8:15
Jobless Claims @ 8:30
PMI Composite Final @ 9:45
Natural Gas Inventories @ 10:30
Crude Inventories @ 11:00
More Color.......
/ES - Consolidating inside demand between $4740-$4750 with Supply above at
$4770-$780. Ideally would like to wait for buyers to get trapped at the open playing a
break and retest from $4757 ( price holding below $4760 yesterday HOD. i only want to
long if we find support back above supply flipping it to Demand targeting $4780
SPY - Consolidating above demand at $469 with Supply above at $470-$471
- Overall market trend from last week has been Demand flipping to Supply. I would
want to see price fail to hold above $470 playing a pullback and hold for PUTS
- The only I can play long is if price holds above $471 targeting supply at $473
- Gap Down or strong selling at the open below $468 playing a break and retest
hold below $469 targeting new LOD with previous demand below that at $465
SPX - Only interest in playing shorts unless buyers break back above $4745 and
hold I would possibly look to play long targeting $4755. Ideally I want to see a rally fail at
$4710 or buyers get trapped below Supply at $4720 playing short targeting $4600
/NQ - Selling off , would want to see a pull back to Supply at $16750-$16735 with a
failed rally below to play short. I can only play long if we find support back above supply.
QQQ - Looking for buyers to get trapped a the open below $400 to play Puts having
Demand flip to Supply. If buyers and break and hold above $402 I will look long
- Buying at the open failed for a break and retest short from $399 targeting $397
- Strong sell off with a pull back to $398 holding below targeting $396.70
AMD - Gap up from Demand , I would like to see price pull back to $134.50 -$135
To play long targeting $136.60 first then Supply at $139-140
- Strong buying at the open with a failed rally to break back over $140 I would like
to play short targeting $137 first then demand below at $134
TSLA - Gap up overnight into Supply at $240 ( do buyers become trapped ?)
- Or does Supply flip back to demand ? I’m watching this level intraday
AAPL- Gap Down inside demand at $182-$184 making a new LOD
Have a great trading day!
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