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Good Tuesday morning!
And there it is. The oversold bounce we mentioned yesterday materialized and that key level of 5810 to 5870 was the launch point for an oversold market. In case you missed it, this is what was discussed:
"We are at an important inflection point right now and anywhere between 5810 down to 5780 in the ES futures will be an important price zone to watch. And what I mean by that is, I am now expecting a bounce at some point between these levels, and those who have missed the short opportunity will have another chance once we get the bounce."
Well yesterday's low was 5813 in the ES futures so that turned out to be the correct price zone to watch. Again the reason for the call was that the market was due for some "corrective" activity meaning the market got too short too quickly and needed to balance out the "short" inventory. People who were short covered for gains and people who were waiting for the dip also bought down there, so that's basically it.
Now in the overnight trading, we are higher across the board and have had a big pop off of the PPI numbers (Producer Price Index) which is a measure of inflation. The market liked the numbers. Now we have already hit our important upside targets so it might be tricky to determine where we go from here. Was that the bounce we needed and now back down? Or do we have a bit more upside to go? If so 5930 to 5940 would be the next upside targets. Anything in between yesterday's high @ 5879.50 and and the overnight high @ 5918.50 is balance or consolidation, so we could be in for some chop!
Now IF sellers step up and take price back below yesterdays high @ 5879.50, then look for further moves down towards the POC @ 5862.25, then 1/2 back @ 5902, then lower targets. Futures are trading @ 5898 at the time of this writing.
VPOC Update: No new VPOC's yesterday so still have 5 above and 25 below current price. 5950 is the closest one above.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5910 - 5920
Key Levels: 5879.50 Monday's High then 5830-5840
downside target is: 5835 - 5825
/NQ upside target is: 21,100 - 21,130
Key Level: 20,978 Monday High
downside target is : 20,760 - 20,720
/RTY upside target is: 2230 - 2240
downside target is: 2180 - 2170
Economic Data:
4-Week Bill Settlement
8-Week Bill Settlement
4-Month Bill Settlement
NFIB Small Business Optimism Index @ 6:00 AM ET
PPI-Final Demand @ 8:30 AM ET
Jeffrey Schmid Speaks @ 10:00 AM ET
Treasury Buyback Announcement (Preliminary) @ 11:00 AM ET
4-Week Bill Announcement @ 11:00 AM ET
8-Week Bill Announcement @ 11:00 AM ET
4-Month Bill Announcement @ 11:00 AM ET
John Williams Speaks @ 3:00 PM ET
More Color....... By Analyst Rich Rickus
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ES - Key Demand at $5809- 20 with Supply at $5860-50
Bearish
Buyers trapped below $5860 after a pullback below $5850 looking to play SHORT targeting $5833 then $5808
Bullish
Sellers trapped above $5860 after a break and retest above $5865 playing LONG targeting $5880 then $5900
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SPY - Demand at $575- 576 with Supply above at $$579-580
Bullish
Sellers trapped above $580 after a break and retest from $581 targeting $582 then $584
Bearish
Buyers trapped below $580 after a retest from $579 targeting $578 then breakdown into $577
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/NQ - Key Demand at $20690- 20750 with Supply $20900 - 20950
Bullish
Sellers trapped above 20950 looking to play long after a pullback holds above $20965 targeting $21050 then a breakout into $21100
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 $499- 500 with Supply above at $505-506
Bullish
Sellers trapped above $506 looking to play long from a break and retest at $507 targeting high $508s then a breakout into $509
Bearish
Buyers trapped below $506 after a break and retest below $505 looking to play short targeting $503.55 then mid high $501
Also watching
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AAPL Demand at $229-230 with Demand flipped to Supply at $235-234
Bearish
- Sellers trapped below $235 after a break and retest below $234 playing SHORT targeting
$233 then breakdown into $232
Bullish
- Buyers trapped above $235 after a break and retest above $236 playing LONG targeting $237then $238
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AMZN Demand at $215 -216 with Supply above at $221-220
Bearish
Buyers trapped below $221 after a break and retest from $220 looking to play SHORT TARGETING $218 then breakdown into $217
Bullish
Sellers trapped above $221 after a break and retest from $222 looking to play long targeting $223 then breakout into $224
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GOOGL Key Demand flipped to Supply at $192-191
Bullish
Sellers trapped above $192 after a break and retest from $193 looking to play long and target $193.55 s then $195
Bearish
Buyers trapped below $191 after a break and retest from $190 looking to target $188 then $187
Have a great day!
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