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Good Thursday morning,
And there it was! The quintessential "mosh pit" of extremely volatile trading yesterday. (Can't say we didn't warn you!) The FOMC left interest rates unchanged as expected, but traders and investors were hanging on every word Fed Chair Powell spoke during his press conference, and that's why there was so much volatility! They were trying to figure out the path moving forward regarding the impacts of interest rates and tariffs! Not an easy task, hence the madness.
Well, here we are today, and futures are up big across the board. Looking at the markets through the telescope, in the profile pic below, you can see that price has broken out above the two-day balance (of value), and now we are close to breaking back above the May 2nd high of 5725. After that, we will be looking for the March 25th high at 5837. By the way, this target is longer-term and could take some time to reach. It will only be in the crosshairs IF price can hit and close above the May 2nd high today. So please remember, I am not suggesting we are going to 5837 today.
Now, looking at the market through the microscope for today, overnight inventory is about 90% net long, and we have a true gap above yesterday's high, so there is a decent probability of a fade lower to balance out the overnight inventory. As we have mentioned before, look for a move above the overnight high at 5717.50 then back below. That is the first short scenario. The second is if price does not take out the overnight high, then look for a break below the first one minute low, and the stop would be placed just above the one minute high. As always, if price starts to move in our anticipated direction, then move the stop to breakeven as soon as possible, then trail the stop down. First target is prior high at 5675.
As I am writing this report, we just had a sharp liquidation break at 8:30 AM EST after some economic data was just released, jobless claims and productivity and costs, so this changes things a bit. I have to bring this up for an important reason! Since price is already moving away from the overnight high at a decent clip, this means overnight inventory is already balancing out so the short trade (fade) becomes less relevant or probable!
Please member, liquidation breaks takes sellers out of the market, so the opening trade lower could be worth passing on! Now we just need to monitor whether price stays above the prior high at 5675. That is the first key level, then the VPOC at 5709, then 5725, then upper targets. If price stays in this range, then edge to the bulls. However, if price breaks back into prior day range below 5675, then continues below and does not bounce, the next target is the POC at 5649, then we would look for lower targets as listed.
Futures are trading at 5694 at the time of this writing.
VPOC Update: No new VPOC's were added or taken out yesterday, so the closest above is still at 5709, and the closest one below is at 5536. Obviously 5709 is in play today! We still have 7 above and 16 below for now.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5740 - 5760
Key Levels: 5709 VPOC and 5675 Prior High then 5649 POC
downside target is: 5640 - 5620
/NQ upside target is: 20,340 - 20,360
Key Level: 20,054 Prior Day High
downside target is : 19,960 - 19,900
/RTY upside target is: 2020 - 2030
downside target is: 1980 - 1970
Economic Data: ( *Red Star*)
Jobless Claims @ 8:30 AM ET
Productivity and Costs @ 8:30 AM ET
Wholesale Inventories (Preliminary) @ 10:00 AM ET
EIA Natural Gas Report @ 10:30 AM ET
3-Month Bill Announcement @ 11:00 AM ET
6-Week Bill Announcement @ 11:00 AM ET
6-Month Bill Announcement @ 11:00 AM ET
52-Week Bill Announcement @ 11:00 AM ET
4-Week Bill Auction @ 11:30 AM ET
8-Week Bill Auction @11:30 AM ET
30-Yr Bond Auction @ 1:00 PM ET
Fed Balance Sheet @ 4:30 PM ET
More Color By : Rich Rickus
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/ES - Key Demand $5675 with Supply at $5740-50
Bullish : Sellers trapped above $5675 looking to play a break and retest above $5680 long targeting $5710 then $5725
Bearish Buyers trapped below $5600 looking to play short after a break and retest below $5590 targeting $5580 then a break down into $5550
- SPY Key demand at then at $554-555 with Supply above at $562-561
Bullish Sellers trapped above $562 looking to play a break and retest from $563 long targeting $565 then a breakout mid high $566s
Bearish Buyers trapped below $554 after a break and retest below $553 targeting $551’s then a breakdown into $549’s
- /NQ Key Demand at $19700 with Supply above at $19950-19975
Bullish Sellers trapped above $19975 looking to play a break and retest above $20000 long targeting $20,100 then a breakout back into low $2200’s
Bearish Buyers trapped below $19700 looking to play short from below $19650 targeting $19550 then $19475
- QQQ Key Demand at $478 with Supply at $485
Bullish Sellers trapped above $485 looking to play a break and retest from $486 targeting $488 then a breakout into low mid $489s
Bearish Buyers trapped below $478 looking to play a break and retest short from $477 targeting $475 then $474s
Have a great day!!
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