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Good Wednesday morning!
As we mentioned yesterday, the market didn't know what it wanted to do and that's exactly what happened, it went nowhere. It was a perfect example of a day of a two-day "balance", where yesterday's range was contained within Monday's range, and value was overlapping. This morning, however, we are seeing a break lower out of that two-day balance and this is largely due to semiconductors companies NVIDIA and ASML
NVDA is down around 7% as they reported the company would take an approximately $5.5 Billion charge, and the stock was also downgraded this morning. ASML reported earnings, and while they beat on their numbers, that semiconductor stock is down almost 4% this morning adding to the weakness in the tech heavy NASDAQ.
Futures are lower with a true gap outside of prior day's range with overnight inventory that is 100% net short. This sets up the potential for a fade higher to balance out the inventory position this morning. We are already well off of overnight lows so the trade I will be looking for is a long over the first one minute high. If price continues higher then look for overnight 1/2 back above 5384 then prior low, POC, VAL and overnight high around 5419 - 5430. If price keeps going then look for yesterday's 1/2 back at 5453 then upper targets.
Now, if sellers keep price below the first one minute high then we could be seeing more weakness back to the overnight low and lower targets at 5340 - 5330. Further weakness could bring price down to 5300. Futures are trading at 5375 at the time of this writing.
VPOC Update: No new VPOC's were added or taken out yesterday, so we still have 7 above and still 18 below! None are in play today.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5480 - 5490
Key Level: 5430 POC then 5453 1/2 Back
downside target is: 5340 - 5330
/NQ upside target is: 19,000 - 19,050
Key Level: 18,685 Overnight 1/2 Back
downside target is : 18,575 - 18,500
/RTY upside target is: 1930 - 1940
downside target is: 1880 - 1870
Economic Data: Green Star
MBA Mortgage Applications @ 7:00 AM ET
Retail Sales @ 8:30 AM ET
Industrial Production @ 9:15 AM ET
Business Inventories @ 10:00 AM ET
Housing Market Index @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
Beth Hammack Speaks @ 12:00 PM ET
20-Yr Bond Auction @ 1:00 PM ET
Jerome Powell Speaks @ 1:30 PM ET
Treasury Buyback Results @ 2:00 PM ET
Treasury International Capital @ 4:00 PM ET
Jeffrey Schmid Speaks @ 7:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5370-80 with Supply at $5540-28
Bullish : Sellers trapped above $5350 looking to play a break and retest above $5340 long targeting $5475 then $5500s
Bearish Buyers trapped below $5350 looking to play short after a break and retest below $5340 targeting $5315 then a break down into $5200s
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SPY - Key demand at $533-534 with Supply above at $544-43
Bullish Sellers trapped above $544 looking to play a break and retest from $545 long targeting $547 then a breakout mid high $548s
Bearish Buyers trapped below $532 after a break and retest below $531 targeting $528s then a breakdown into $527s
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/NQ - Key demand at $18600 with Supply above at $19256-19300
Bullish Sellers trapped above $19100 looking to play a break and retest above $19150 long targeting $19300s then a breakout back into low $19400’s
Bearish Buyers trapped below $18700 looking to play short from below $18655 targeting a breakdown $18500s then low mid $18400s
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QQQ Key Demand at $450 -449 with Supply at $466-468
Bullish Sellers trapped above $449 looking to play a break and retest from $450 targeting $452 then a breakout into low mid $454s
Bearish Buyers trapped below $449 looking to play a break and retest short from $448 targeting $447 then $446s
Also watching
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NVDA - Key Demand at $109 with Supply above at $116 -114
Bullish - Sellers trapped above $110 after a break and retest from $111 looking to play LONG targeting $113 then a breakout into $115s
Bearish - Buyers trapped below $109 after a break and retest from $108 looking to play short targeting $106 then breakdown into $105s
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AMD - Key Demand at $95-96 with Supply above at $101-100
Bullish - Sellers trapped above $113 with it forming Support looking to play a break and rest long targeting $115 then $116
Bearish - Buyers trapped below $109 after a break and retest below $108 targeting $106 then $105
Have a great day!!
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