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Good Wednesday morning!
Seems like a repeat of yesterday pre market when the PPI came out and the futures ripped higher. Well this morning the CPI report came out and the move was even stronger! The bounce I was expecting from Monday morning has materialized but this move is even much larger than I had anticipated. That next target level of 5930 to 5940 is now over 30 points below as I write this!!! Very impressive. I will say, however, and the reason for the warning sign above, expect big time volatility!
Yesterday when we hit our upper targets, there was a very nice pullback, actually two of them, but BOTH times they were defended by the bulls. The first pullback was @ 10:45 AM EST and the buyers jumped back in at noon. The second sharp liquidation break started @ 2:45 PM EST and that seemed to be the nail in the coffin for the bulls, BUT they stepped back in and took the markets sharply higher leaving into question what the next move was going to be! Seems like they knew something to me and were willing to stay long with bank earnings and the CPI report being released in the very near future.
Well this morning, the buyers have made a HUGE statement that they are not ready to throw in the towel just yet. Or are they? Question on my mind is this just a pump and dump or back up we go!?!?? Time will tell but we are already at our upper targets and we could be going back to 6015 in the ES futures!
Currently futures are up huge across the board with the S&P up around 90 handles and the NASDAQ up over 350! On huge gaps like this it is hard to say whether they can hold this pop or not so we could be in for some balance or digestion up at these levels. IF sellers step up and take price back below the first 1 minute low, then the move could fade lower to balance out the almost 100% net long overnight inventory. Look for a move back down to the 5950 VPOC. By the way the VPOC @ 5950, which was above us and is now below us, is still valid and untested. VPOC's need to be taken out during regular trading hours only. Futures are trading @ 5970 at the time of this writing.
VPOC Update: No new VPOC's yesterday but with this huge gap we have 4 above and 26 below and 5950 is the closest.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5975 - 5985
Key Levels: 5950 VPOC
downside target is: 5860 - 5850
/NQ upside target is: 21,410 - 21,430
Key Level: 21,130 Tuesday High
downside target is : 20,825 - 20,800
/RTY upside target is: 2250 - 2260
downside target is: 2225 - 2215
Economic Data:
3-Yr Note Settlement
10-Yr Note Settlement
30-Yr Bond Settlement
MBA Mortgage Applications @ 7:00 AM ET
Thomas Barkin Speaks @ 8:00 AM ET
CPI @ 8:30 AM ET
Empire State Manufacturing Index @ 8:30 AM ET
Neel Kashkari Speaks @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
John Williams Speaks @ 11:00 AM ET
Austan Goolsbee Speaks @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
Beige Book @ 2:00 PM ET
Treasury Buyback Results @ 2:00 PM ET
More Color....... By Analyst Rich Rickus
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ES - Key Demand at $5880-85 with Supply at $5910-5920
Bearish
Buyers trapped below $5920 after a pullback below $5910 looking to play SHORT targeting $5885 then $5860
Bullish
Sellers trapped above $5920 after a break and retest above $5925 playing LONG targeting $5955 then $5975
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SPY - Demand at $578 - 579 with Supply above at $585 - 586
Bullish
Sellers trapped above $585 after a break and retest above $586 targeting $588 then $589
Bearish
Buyers trapped below $585 after a retest from $584 targeting $582 then breakdown into $580
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/NQ - Key Demand at $20900 with Supply $21200 - 21150
Bullish
Sellers trapped above 20900 looking to play long after a pullback holds above $20950 targeting $21150 then a breakout into $21200
Bearish
Buyers trapped below $20950 looking to play SHORT after a pullback holds below $20900 looking to play short targeting $20800 then a breakdown into $20750
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QQQ - Key Demand at $505 with Supply above at $510 -509
Bullish
Sellers trapped above $505 looking to play long from a break and retest at $506 targeting high $508s then a breakout into $509
Bearish
Buyers trapped below $505 after a break and retest below $504 looking to play short targeting $503 then mid high $501
Have a great day!
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