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Good morning!
S&P hit new all time highs again yesterday, however the way the markets closed could be signaling a bit of buyers fatigue! Are we possibly seeing some storm clouds brewing?!?! The current environment is still one of crazed euphoria but sometimes the markets need to break lower before going higher again, and that's where we could be at the moment!
Selling started at about 3:15 PM EST and didn't stop until the closing bell leaving what is referred to as an inverted hammer on the charts. Don't worry if you don't get the lingo but it just signals a reversal where sellers actually overwhelmed buyers...something that has not happened in a very long time. Also the fact that we are now below prior days range in the pre-market confirms sellers are still present. Key will be once the bell rings and domestic traders commence their operations, this will show us just how aggressive sellers will be.....Or....do the buyers step in again and stop the downside selling?!?! This will be important moving forward.
Futures are all lower this morning with a true gap below prior days range. Overnight inventory is also 100% net short so there is the decent probability that the market will fade the gap (meaning go higher) to balance out the overnight inventory first. That trade consists of a look below and fail at the overnight low, which currently sits at 5114.25 (at the time of this writing and may change before the opening bell), or a one minute high gets taken out. First target will be overnight 1/2 back at 5127, then prior days low at 5134.25. As I mentioned yesterday, this complete lack of fear leads to complacency and that is usually the exact time the market slaps unsuspecting people upside the head!!!
In the profile pic below, anything that remains below the 5136 area is a good start for the bears! Losing 5115 should lead to 5110 then 5100-5095.
Back above 5127 and 5136 puts things back in status quo for the bulls. This should be interesting so stay frosty!!
No new VPOC's yesterday so we still sit with 18 untested points of control below current price.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5150 - 5160
downside target is: 5120 - 5115
/NQ upside target is: 18,405 - 18,425
downside target is : 18,175 - 18,150
/RTY upside target is: 2097 - 2099
downside target is: 2060 - 2058
Economic Data:
PMI Composite Final @ 9:45 AM EST
Factory Orders @ 10:00 AM EST
ISM Services Index @ 10:00 AM EST
No FED Speakers today. Chairman Powell speaks Wednesday and Thursday!
More Color.......
NVDA - Still Bullish. Only losing $837 could change the tone. No short yet. Target hit yesterday......$850 then $875!! $876.95 yesterdays highs!
META - Bullish to neutral now. Key demand remains over $495, however aggressive shorts may start as long as price stays below $496. Any loss of $495 confirms sellers.
AAPL- Still Bearish! Supply still coming into this stock. Lost key support @ $179 and now trading $171 pre-market! October lows @ $166 now target.
AMZN - Short below $177.49....needs to stay and close below that level.
As ALWAYS, have your stops in place!!!
Have a great day!
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