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Good morning.
Finally!!! We actually had a liquidation break that is holding, and as I have been saying for a while, as the market keeps climbing like there's no end in sight, it becomes subject to a liquidation break as people finally realize things have gone too far too fast! And those storm clouds we saw brewing brought in some serious thunder and lightening to the downside yesterday!
The triple top we marked off in the prior MC issue told us that buyers were "thinning" out and there just aren't as many people willing to step up and keep paying these exorbitant prices anymore. Doesn't mean we won't break to new highs in the future but I am definitely positioning myself more to the downside at this point. It will all depend on how we close today and how the market reacts to the ISM Manufacturing data @ 10:00 AM EST.
In the profile pic below, I have once again marked off the very important levels to watch, and as you can see, we lost several key support levels and as long as we stay below 4910-4905, then the sellers could take back control.
If we lose 4875, then 4860-4850 would be the next target levels in the short term. At that point, in my opinion, the tone and trend of the markets will have definitely changed and there are a lot of people trapped above! We are NOT at panic levels yet but the writing is starting to appear on the wall. Again, where we close today and where value develops will be key so lets see just how confident the bulls are today.
Futures are higher this morning and we are squarely inside of prior days range. Overnight inventory is net long but we are no where near prior days high. This could be a "balance day" where the market "digests" what just happened and are trying to figure out their next moves, especially after the FED announcement yesterday. By the way, as expected, the FED left interest rates unchanged at current levels.
Yesterday's sell off added a new VPOC above us @ 4950 and we actually took out THREE... yes 3...VPOCS below us. This is a definite change in trend signal and we now sit with 14 untested points of control below us.
/ES upside target is: 4900-10
downside target is: 4880-70
/NQ upside target is: 17,425-450
downside target is: 17,325-300
/RTY upside target is: 1987-88
downside target is: 1960-58
Economic Data Today:
Jobless Claims @ 8:30 AM EST
PMI Manufacturing Final @ 9:45 AM EST
ISM Manufacturing @ 10:00 AM EST
Natural Gas Inventories @ 10:30 AM EST
More Color.......
/ES - Key Demand at $4865-4875 with Supply at $4930-4940
- Look for Demand to flip to Supply following yesterday's trend. If price gets below
$4860 there can be more downside where nearest demand isn't until $4820-30
SPY - Consolidating above Demand at $482 - 484 Supply flipped to Demand at
$488. If price can hold below $482 I would like to play short targeting $480
- Ideally I want to play a break and retest long from $884 targeting $486
- Buyers trapped at the open holding below $487 to play short targeting $485.80
SPX - I would like to play short if price can break and hold below $4830
- Key Demand at $4840 - 4850 then not until $4790
/NQ - Key Demand at $ 17200 with supply at $17380 -17400
- Ideally I want to see buyers trapped at the open a failure to break and hold above
Supply I will look to play short as vice versa if sellers get trapped at Demand
QQQ - Key Demand at $414-416 with Supply at $420-422
- Buyers trapped below $420 to play short targeting $418 first the $417
AMD Support formed at $167 with key demand below at $162
- I would like to play long sellers become trapped at support or demand
TSLA Key Supply at $192 and $194-196 with Demand at $183-184
Have a wonderful day!
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