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Good Wednesday morning!
Continued strength yesterday as the DOW and S&P hit new all time highs, along with another big move in the small caps with the RUSSELL 2000 hitting new 2 year highs, however, this morning futures are under heavy selling pressure so there will be some question as to the longevity of those gains!!
The tech heavy NASDAQ lagged behind its peers yesterday with some profit taking in the FANGMAN stocks and others in the tech and AI space, and they are taking the biggest hits again this morning!
The key levels we talked about yesterday held again as S&P Cash 5595 was not tested and 5692 held like a champ in the /ES futures, however, after some comments from the Biden administration regarding what the U.S. can and cannot send to China as far as semiconductors plus comments from former President Trump in regards to Taiwan and its security have futures tumbling in the large cap tech, and specifically, the chip space.
Overnight inventory is almost 100% net short AND we have a true gap outside of prior days range. There may be a fade higher to balance out this inventory skew so look for the overnight low to be tested. If it's not, then look for a break above the 1 minute high and stop would be below the 1 minute low, then trail up accordingly! Because it is such a large gap, it will be hard to determine the bounce targets because we always will look for prior days low to be hit, but because this is such a huge gap down, even that level may not be hit!
Looking further out, I have some lower target levels so please keep them in mind. We may not hit them today, but over the next day or two, they could easily be reached. Today will be all about how much of a bounce is achieved in the markets. If the bounce is very shallow and we do not even fill the gap to yesterdays low, then this will be the most bearish outcome and look for more downside in the days to come! If buyers step back in and consider this drop a buying opportunity, then look for the gap to fill and possibly even hit the POC...Point of Control. Please see other key levels and price targets in the profile pic below.
VPOC Update: No new VPOC's were added yesterday so we are still 25 VPOC's below current price levels, however this could very easily change today!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5690 - 5700
Key Level: 5690 - 5686 Yesterday low & Overnight 1/2 Back
downside target is: 5635 - 5625
/NQ upside target is: 20,750 - 20,770
Key Level: 20,575 POC & 1/2 Back
downside target is : 20,265 - 20,225
/RTY upside target is: 2290 - 2300
downside target is: 2260 - 2250
Economic Data:
Housing Starts and Building Permits @ 8:30 AM EST
Industrial Production @ 9:15 AM EST
Crude Inventories @ 10:30 AM EST
20 Year Bond Auction @ 1:00 PM EST
Beige Book @ 2:00 PM EST
More Color.......
/ES - Demand $5659- 5672 with Supply at $5718 (HOD) - $5710
1. Sellers trapped above $5659 looking to play long off a break and retest targeting $5680 then $5695
2. Buyers trapped below $5658 and holding below after a pullback will be looking to play short targeting $5645 then $5630
SPY - Demand at $558-559 with Supply at $564-565
1. Buyers trapped below $557 after a break and retest from $556 playing short targeting $$55 then $554
2. Sellers trapped above $558 looking to play long from a break and retest from $559 targeting $562 then $564
SPX Demand at $5609-5620 Key Supply at $5670
1. A breakdown below $5609 and holding below after retest I will look to play short targeting $5550
2. A bounce above $5610 and reclaim support I will look to play long
targeting $5622 then $5635
/NQ Key Demand at $20250 with Supply above at 20465 -20500 then at $20800
1. Sellers trapped above $20250 looking to play long targeting $20275 then 85
2. Buyers are trapped below $20249 off a break and retest targeting $20200
QQQ Demand at $488-487 with Demand flipped to Supply above at $495
1. Sellers trapped above $495 looking to play long off a break and retest
targeting $496 then $497
2. Buyers trapped below $493 after a break and retest from $494 looking to targeting new LOD
TSLA Gap Down Key Demand at $244-243 with Supply above at $256-257
1. Sellers trapped above $243 looking to play long after a bounce targeting $245 then $248 then $250
2. Buyers trapped below $242 after a break and retest looking to play short
AMD Key Demand at $170 that can flip Supply with Demand not until $165-164
1. Sellers trapped above $170 looking to play long targeting $173 then $174
2. A breakdown below $169 and holding below I will look to play short off a break and retest from $167 new LOD
NVDA Key Demand at $112-114 with Supply above at $141 HOD -137
1. Sellers tapped above $112 looking to play long targeting $115 then $118
2. A breakdown below $112 and holding I will look short after a break and retest from $111 targeting $109 then $107
Have a great day!
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