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Good Monday morning and Happy Holidays!!
As we mentioned before, ever since the key levels of 21,880 in the NDX and 6030 in the S&P were lost last week, there has been a significant, although short term, pullback in the markets. The S&P has shed almost 4.5% and the NDX lost almost 5.5%. Now in the grand scheme of things, these are not earth shattering numbers, and as I said before, taking a bit of froth off of the top is healthy, however where we go from here is a bit cloudy.
We have had a very large bounce in the markets on Friday and futures are mixed this morning, so we could really go either way today and the rest of this week. We still are in a historically bullish time of year and we still have the "Santa Claus Rally" going on which lasts into the first two days of the New Year! **Don't forget the markets close early tomorrow @ 1:00 PM EST and of course are closed on Christmas Day.
Friday's range will be absolutely key and what I mean is if the buyers take price back above, then we should see more buying and target back to 6000. However, if the sellers step on the gas further, then we will be looking to fill the gap in the S&P back down to 5783 which is the high back on 11/5 which of course this is where the markets exploded after election day.
In the key levels and profile pic below, we are in the upper 1/2 of Friday's range and whether or not price stays there will be very important. We are already below the key level of 6000.50 which is the POC and settlement, and if 5975 gets taken out which is 1/2 back and Value Area Low, then we will be looking for lower targets then Friday's low of @ 5900! Futures are trading @ 5994 at the time of this writing.
VPOC Update: No new VPOC's were put in on Friday. We still have 3 above and 26 below current price.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 6040 - 6050
Key Levels: 6000.50 POC & Settlement
downside target is: 5960 - 5950
/NQ upside target is: 21,800 - 21,825
Key Level: 21,502 top of spike then 21,486 1/2 Back
downside target is : 21,300 - 21,270
/RTY upside target is: 2290 - 2300
downside target is: 2255 - 2245
Economic Data: Very light day today
Chicago Fed National Activity Index @ 8:30 AM ET
Consumer Confidence @ 10:00 AM ET
3-Month Bill Auction @ 10:00 AM ET
6-Month Bill Auction @ 10:00 AM ET
52-Week Bill Auction @ 11:30 AM ET
2-Yr Note Auction @ 1:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - KEY DEMAND $5866- 80 with Supply $6060-40 (previous Demand)
Bearish
Buyers trapped below $6040 after a pullback below $6030-35 looking to play SHORT targeting $5980 then $5920
Bullish
Sellers trapped above 6040 after a break and retest above $6050 playing LONG targeting $6100 then $6120
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SPY - Demand at $586-585 with Supply at $594-595
Bullish
Sellers trapped above $594 after a break and retest above $595 looking to play LONG targeting high $598 then breakout into $600
Bearish
Buyers trapped below $593 after a retest from $592 targeting $590 then breakdown into $589
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/NQ - Key Demand at $21300-11 LOD with Supply at $21800-907
Bullish
Sellers trapped above $21900 looking to play long after a pullback holds above $21900 targeting $22000 then $22200
Bearish
Buyers trapped below $21800 looking to play SHORT after a pullback holds below $21750 targeting $21600 then $21500
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QQQ - Key Demand at $520-522 with Supply above at $530
Bullish
Sellers trapped above $522 looking to play long from a break and retest at $523 targeting high $524s then a breakout into $525 and $526
Bearish
Buyers trapped below $522 after a break and retest below $521 looking to play short targeting $519 then mid high $516s
Have a great day!
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