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Good Monday morning!
So now what? The markets have pulled back as we have been talking about for some time, and our lower targets have been hit @ 5866, which was the December 20th lows, so what should we be looking for next?! I am glad you asked.
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.
Now even though I have the picture above you, I do not have an actual crystal ball so I can't tell you exactly when it's going to happen, but keep your eye out for a bounce where we can short into again. We might have to drop a little bit lower first but I think the market is due for a bit of corrective activity back to the upside before the next leg down.
Right now futures have flushed lower again in the overnight session and we have a true gap down on overnight inventory that is 95% net short. We are also already below my lower target area of 5840-5830 so this is telling me that we might be overly short and inventory needs to balance. Price is already starting to move back up and we are now over 5810 so the first upside target will be the gap fill back up to Friday's low @ 5845.25. Any move back into Fridays range we would then look for the Value Area Low @ 5854.50 then the POC @ 5864. Any price action above that then look for upper targets. Keep an eye out for a long over the first 1 minute bar once the opening bell rings. If that high does not get taken out then no long yet. If that one minute high does get taken out then look for upside and then put stop at breakeven ASAP then trail higher if it moves up!
IF ultimately the sellers keep it below the Fridays low, then this is the most bearish outcome so look for 5780 eventually! Futures are trading @ 5830 at the time of this writing.
VPOC Update: Yes, you guessed it. Because of the big gap down on Friday, we added another new VPOC above @ 5950 so we are now back to 5 above and 25 below current price. 5870 was taken out on Friday!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5900 - 5910
Key Levels: 5845.25 Friday Low then 5864 POC
downside target is: 5840 - 5830
/NQ upside target is: 21,200 - 21,240
Key Level: 20,874.50 Friday Low then 20,961 VAL
downside target is : 20,860 - 20,820
/RTY upside target is: 2225 - 2235
downside target is: 2190 - 2180
Economic Data:
3-Month Bill Auction @ 11:30 AM ET
6-Month Bill Auction @ 11:30 AM ET
Treasury Statement @ 2:00 PM ET
More Color....... By Analyst Rich Rickus
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ES - Key Demand at $5845-50 with Supply at $5880-90
Bearish
Buyers trapped below $5890 after a pullback below $5880 looking to play SHORT targeting $5865 then $5845
Bullish
Sellers trapped above $5890 after a break and retest above $5895-900 playing LONG targeting $5920 then $5935
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SPY - Demand at $579-80 with Supply above at $$584-585
Bullish
Sellers trapped above $580 after a break and retest from $581 targeting $583 then $585
Bearish
Buyers trapped below $580 after a retest from $579 targeting $578 then breakdown into $577
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/NQ - Key Demand at $20874-20915 with Supply $21200-21190
Bullish
Sellers trapped above 21200 looking to play long after a pullback holds above $21210 targeting $21300 then $21375
Bearish
Buyers trapped below $21200 looking to play SHORT after a pullback holds below $21185-90 targeting $21100 then $20975
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QQQ - Key Demand at $503-504 with Supply above at $511-512
Bullish
Sellers trapped above $511 looking to play long from a break and retest at $512 targeting high $513s then a breakout into $514s
Bearish
Buyers trapped below $511 after a break and retest below $510 looking to play short targeting $508 then mid high $507s
Also watching
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PLTR Demand at $65 with Supply at $68
Bearish
Buyers trapped below $68 after a break and retest from $67 looking to play SHORT TARGETING $65 then $64s
Bullish
Sellers trapped above $68 after a break and retest from $69 looking to play long targeting $71 then $72s
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NVDA Demand $135-136 with Supply at $140
Bearish
Buyers trapped below $140 after a break and retest from $139 looking to play SHORT TARGETING $ $137 then high $136s
Bullish
Sellers trapped above $140 after a break and retest from $141 looking to play long targeting $143 then $144
Have a great day!
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