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Good Wednesday morning!
For the first tine in a while, the bulls failed big time and now we have a large gap down this morning after earnings reports from GOOGL and TSLA. Now what do I mean by my statement that bulls failed?? Well as I mentioned yesterday....
"IF the bulls can get it back to 5616 then above, look for 5640 -5645 then possibly 5655-5660. If the price action stays below 5616 and above 5595 (1/2 back) then it will be more of a balancing day. Below 5595 look for 5588.50 then possibly 5580-5575. Think of this in terms of stages and key battleground areas between buyers and sellers!"
Well the buyers took it above 5616 and ended up hitting highs of 5629.75 yesterday, HOWEVER, the fact that they could NOT reach 5640 and then went back below 5616, and then back below 5595, this is what I mean by my statement above....they failed to keep it higher!!!
This is an important clue as to the strength (or weakness) of any market and the fact that the "beach ball market" could bounce back up and not take it higher.... AND stay there.... is a big tell in our opinion More downside coming!
This morning as mentioned, futures are sharply lower WITH a true gap below yesterday's range and overnight inventory is 100% net short. With any true gap and overnight inventory 100% net short, we will look for some kind of fade move higher to balance out the inventory. The play is a look below overnight low then long back above, or if the overnight low does NOT get tested, long above a one minute high then trail stops! With such a large gap lower, the fade may not reach prior days low as this is always the target, so let see if we even get a fade and just how high does it go? Buckle up friends...we could be finally in for a well deserved market correction and pullback.
VPOC Update: No new VPOC was added yesterday however the recent VPOC added @ 5549.25 is definitely in play today and most likely will be taken out. We still have 1 above @ 5699.50 and 25 (soon to be 24) VPOC's below and there is a very good chance we put it another VPOC above as today's Point of Control is higher @ 5611.25. According to current probabilities and statistics as of this writing, there is a 96% chance we stay below 5611.25 today!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5625 - 5630
Key Level: 5593.25 - 5585 Yesterday's Low & Overnight High
downside target is: 5549.25 VPOC from 7/19 then 5527
/NQ upside target is: 20,100 - 20,125
Key Level: 19,785 - 19,775
downside target is : 19,705 then 19,675
/RTY upside target is: 2282 - 2285
downside target is: 2241 - 2238
Economic Data:
PMI Composite Flash @ 9:45 AM EST
New Home Sales @ 10:00 AM EST
Crude Inventories @ 10:30 AM EST
More Color.......
/ES - Demand $5540-50 then $5509 with Supply at $5585 and $5631-17
1. Buyers trapped below $5585 and holding below after a pullback will be looking to play short targeting $5570 then $5560
2. Sellers trapped above $5590 where Supply flips back to Demand looking to play long targeting $5600 then $5608
SPY - Demand at $547 -548 with Supply back at $556-55
1. Buyers trapped below $553 after a break and retest playing short
targeting $552 then $551
2. Sellers trapped above $549 looking to play long from a break and retest from $550 targeting $552
SPX Demand at $5507-5494 then $5550 with Supply at $5586-5580
1. A breakdown below $5549 and holding below after retest from $5550 I will look to play short targeting $5535
2. A bounce above $5560 and reclaim support I will look to play long
targeting $5570 then $5580
/NQ Key Demand at $19654-19697 with Supply at $19886
1. Sellers trapped above $19886 after Supply flips back to Demand looking to play long targeting $19900 then $19910
2. Buyers are trapped below $19886 off a break and retest targeting $19850
QQQ Demand at $473 -471 with Supply above at $478 $486-484
1. Sellers trapped above $471 looking to play long off a break and retest
from $472 targeting $475 then $478
2. Buyers trapped below $486 after a break and retest below $485 looking to play short targeting $483 then $481
AMD Key Demand at $150-152 with Supply above at $157-156
1. A break and retest below $157 from $156 I would like to play short
targeting $153 then $152
2. I would only like to play long if Supply flips back to demand / Support above $157 targeting $160
TSLA Key demand at $225-230 with Supply above at $245 -246
1. Sellers trapped above $230 and holding I will look to play long targeting $233 then $234
2. Buyers trapped below $237 I will look to play short targeting $234
NVDA Key Demand at $119-120 with Supply above at $125
1. Sellers trapped above $119 looking to play long targeting $121 then $123
2. A breakdown below $122 and holding I will look short after a break and retest from $121 targeting $119 then $117
Have a great day!
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