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Good morning and happy Tuesday!
We hope everyone enjoyed the long holiday weekend but now its time to get right back to business for a new trading week ahead....albeit a shortened one!
Not much has changed structurally from our last report and as I mentioned before, please look at the profile picture below.....we are still in a very large area of balance and even though futures sold off rather sharply in the overnight session, buyers seem to be in the mix bringing them back towards Fridays lows, so the key for today will be..... do we close inside of prior days range? Below it? Above it?!?!
I am still seeing the bulls in control in the /ES and /NQ although the /RTY still seems to be digesting the huge move from the October lows. Continue to trade a bit on the cautious side because things are not as clear and sometimes the markets get into this kind of "funk" or "balance" and it takes time to sort things out!!!! Remember this is a marathon not a sprint!
As I mentioned last Friday.....
"It is now a bit tricky to determine the next big market move either higher or lower. I would say the probabilities for both stand at 50/50...meaning take out a quarter and flip it....that is where we stand at the current moment so don't fight it and don't get disappointed if the market stays in range and just chops around! Hint...look at the yellow areas....overlapping!!!"
Well that's exactly what we got on Friday!!!
Futures are lower this morning with overnight inventory almost 90% net short and it may or may not be a true gap. A true gap is one where the market opens either above or below a prior days trading range and that is important because some people could be very disappointed. The main thing to watch today will be if the downside targets hold and we move back higher or will sellers start to get more aggressive?!
/ES upside target is: 4845-50
downside target is: 4790-85 (*if lost, then 4770-4765 will be key!)
/NQ upside target is: 17,080-090
downside target is: 16,840-830
/RTY upside target is: 1991-94
downside target is: 1949-47
Economic Data Today:
Very Light Today
New York Empire State Manufacturing Index @ 8:30 AM EST
FED Board Governor Waller Speaks @ 11:00 AM EST
More Color.......
/ES - Consolidating above Demand from last week at $4785-$4795 then more demand
at $4765-$4770 with Supply above at $4830-$4840. If price can break and hold below
$4760 we can see more downside to previous Demand below that at $4735-$4725 with
a LOD below at $4702 . Need more information to develop intraday for context.
SPY - Key Demand zone at $472- 473 . Above that is Supply at $477-478
- Sellers at the open pushing price back down to Demand playing a break and
retest from $472 targeting $474 first then $475.45
- Buyers at the open pushing price back up to $476 with it failing to hold above
$477 looking to play short after a pullback to $477 targeting $475 then $474
- Strong Sell off within the first two hours breaking below $471 with it failing to
pullback and hold above $472 then I will look to play short targeting $470
- Strong buying within the first two hours , price breaks and holds above $477 on a
pullback after it breaks $$78.67 HOD , playing long targeting another new HOD
SPX - Key Supply Zone $$4800 -$4790 making new HOD last week at $4802. Strong
support at $4770 where it bounced last week. Below that leaves room to the downside.
/NQ - Key Demand and bounce at $16770 with Key Demand below that at $16650. If
we can break below and hold, I will play short . Key Supply above at $17050-17000
QQQ - Bounced from Demand overnight at $405-406 with Supply at $410-411.
- Strong buying at the open with a pullback hold above $408 then I will look to play
long or if there is a sell off at the open and price holds above $405 I’ll play long.
- Sellers pushing price below $405 failing to reclaim above I will look short.
TSLA - Gap Down into Demand at $212-213 with it selling off since it made it HOD 2
weeks ago at $256. Ideally I want to see buyers trapped at the open below $220 to play
short from there targeting $214 first then another LOD. No way I will look to play long
uncles price reclaims $225 and holds above as support ( still need to see buyers active)
NVDA - Strong bounce at Demand $543-44 now consolidating inside supply $551-53
GS Higher after earnings although still trading near 52 week highs and supply zone around $390
BA Still having issues although coming into an interesting pullback level around $210-$211. Could be a "right or right out" trade!!!
Have a great trading day!
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