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Good Wednesday morning,
Time to protect gains!
That was a wild day yesterday! Tuesday started off rather normally, and there was balance and responsive trade, back and forth for many hours. However, there was a sharp liquidation break at 2:15 p.m. EST, and price dropped below that key level of 5947, where lower targets were then hit! It looked like the bears were onto something, however, the buyers had other plans, and took the price right back up in a big way into the close! But fast forward to this morning, and futures are lower across the board as sellers are starting to show up in greater numbers. The point I am trying to make is that the market is tired so protect longs and look for short opportunities at this point!
In the profile pic and key levels below, you can see how we broke out of balance on the 15th of May, and hit new two-and-a-half-month highs on Monday, a gain of 23.5% from the April 7th lows, not bad! You can also see how the market is rolling over at these levels, and the buying pressure is slowing down. It makes sense after such a big move. This does not mean we can't go higher from here, however, I am looking for a pullback before buyers step back in and we ultimately hit new all-time highs again. But for now, let's protect and guard our money!
Right now, futures are gapping down below the prior day's low of 5927. This is the first key level we must pay attention to this morning! If buyers can push the price back above 5927 and stay there, then look for the fade higher to VAL (Value Area Low) and halfback at 5951.50. If buying pressure sustains, then look for POC at 5960, then prior highs at 5971, then upper targets at 5980-5990.
Now, if sellers take price below 5927 and stay there, then look for a retest of the overnight low at 5905, which is the top of the lower target range of 5905-5895. If price drops below 5895, then the next stop would most likely be 5860-5850. As I said, the market is getting tired but that does not guarantee it has to go lower, but I would rather be defensive at this time!
Futures are currently trading at 5921 at the time of this writing.
VPOC Update: Again, no new VPOC's were added or taken out yesterday, so we still have 5 above and 20 below. Closest one above remains at 6006 and closest below is 5854.50. There is a good chance we add another new VPOC above at 5960 unless buyers get aggressive. Right now there is only a 15% chance of hitting 5960 today!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5980 - 5990
Key Levels: 5927 Prior Low then VAL 5951.50
downside target is: 5905 - 5895 then 5860-5850
/NQ upside target is: 21,500 - 21,525
Key Level: 21,298 Prior Low then VAL 21,419
downside target is : 21,220 - 21,200
/RTY upside target is: 2130 - 2135
downside target is: 2090 - 2080
Economic Data: Very Light
MBA Mortgage Applications @ 7:00 AM ET
Atlanta Fed Business Inflation Expectations @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
Thomas Barkin Speaks @ 12:00 PM ET
20-Yr Bond Auction @ 1:00 PM ET
Treasury Buyback Results @ 2:00 PM ET
More Color By : Rich Rickus
- /ES - Key Demand $5925 then at $5800 with Supply $5993.5
Bullish : Sellers trapped above $5925 looking to play a break and retest above $5930 long targeting $6000
Bearish Buyers trapped below $5865 looking to play short after a break and retest below $5860 targeting $5810 then a break down into $5700's
- SPY Key demand at then at $583-584 with Supply above at 596
Bullish Sellers trapped above $584 looking to play a break and retest from $585 long targeting $588 then a breakout mid high $590s
Bearish Buyers trapped below $584 after a break and retest below $583 targeting $580 then a breakdown into $579
- /NQ Key demand at $21090 -21000 with Supply above at $21562
Bullish Sellers trapped above $21090 looking to play a break and retest above $21100 long targeting $21200 then a breakout back into low $21300’s
Bearish Buyers trapped below $2100 looking to play short from below $20950 targeting $20800 then $20600
- QQQ Key Demand at $512 then at $516 with Supply at $522-521
Bullish Sellers trapped above $516 looking to play a break and retest from $517 targeting $519 then a breakout into low mid $520's
Bearish Buyers trapped below $516 looking to play short from below $515 targeting $514 then $513
Have a great day!
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