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Good Wednesday morning,
Bullseye! Upside targets were nailed. As we mentioned yesterday, watching and using the key levels and targets is very important, and Tuesday's price action was spot on.
"The key thing each day is watching the levels and targets that are posted and then using them to help guide your trades. Please remember that price is just an advertising mechanism, while time and volume validate and judge an auction!"
Also very helpful:
"Another important level yesterday was 5490 in the S&P. As I said, price had to stay over 5490 to remain bullish. Well, intraday price went below 5490, down to 5468, but closed at 5528, so the edge still remains with the bulls. Also, as mentioned, the next upper targets in the S&P remain at 5571 and then 5645."
Yesterday's high in the S&P was 5571.95!
In the profile pic and key targets below, /ES futures are down -75 points right now (obviously subject to change by the time you read this), and today's lower targets will be very important moving forward. I say this because the bulls have had a very nice run over the past seven trading days, essentially going straight up, and we could be in for a corrective pullback before heading higher, and we are definitely seeing that this morning!
Another reason I am leaning this way is because of what happened in yesterday's trading session. We had what is called a "poor high". This happens when buyers basically run out of gas, and buying pressure dries up. It is not a bad thing but just something that happens when a market gets too long and inventory needs to rebalance. And lastly, we hit our initial target of 5571 in the S&P. All of these signs tell me the market is stretched a this point.
/ES futures are well below very key levels this morning, starting with the POC at 5589, 1/2 back at 5561, and VAL (Value Area Low) at 5559. Sellers have gotten aggressive in the overnight trade, and there has also been economic data recently released that traders and investors are not happy with the numbers, so lower targets have already been breached at 5545 - 5535!
If price can get back above the lower target of 5545-5535, then I would be looking for a long back over 5545, then targeting into the value area above 5559, then 1/2 back, then the POC and then poor high. Upper targets would be next at 5610-5625.
Now, if sellers keep price below 5535, then edge remains with the bears and look for lower targets of 5515-5500, which price is hitting as I write this, then 5480-5470. 5450 would be next stop!
Futures are trading at 5505 at the time of this writing.
VPOC Update: No new VPOC's were added or taken out yesterday, and the closest one above is still at 5690, and the closest one below is at 5315. We continue to have 7 above and 15 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5610 - 5625
Key Level: 5559 VAL & 5561 1/2 back
downside target is: 5545 - 5535 then 5515 - 5500 then 5480 - 5470
/NQ upside target is: 19,750 - 19,780
Key Level: 19,400 Prior Low and VAL
downside target is : 19,300 - 19,275
/RTY upside target is: 1995 - 2005
downside target is: 1960 - 1940
Economic Data: Very Busy Day ( Red Star)
2-Yr Note Settlement
5-Yr Note Settlement
5-Yr TIPS Settlement
7-Yr Note Settlement
20-Yr Bond Settlement
MBA Mortgage Applications @ 7:00 AM ET
ADP Employment Report @ 8:15 AM ET
GDP @ 8:30 AM ET
Treasury Refunding Announcement @ 8:30 AM ET
Employment Cost Index @ 8:30 AM ET
Chicago PMI @ 9:45 AM ET
Personal Income and Outlays @ 10:00 AM ET
Pending Home Sales Index @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement (Preliminary) @ 11:00 AM ET
3-Yr Note Announcement @ 11:00 AM ET
10-Yr Note Announcement @ 11:00 AM ET
30-Yr Bond Announcement @ 11:00 AM ET
Survey of Business Uncertainty @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
Farm Prices @ 3:00 PM ET
More Color....... By Analyst Rich Rickus
- /ES - Key Demand $5480-90 with Supply at $5580
Bullish : Sellers trapped above $5480looking to play a break and retest above $5590 long targeting $5575 then $5590
Bearish Buyers trapped below $5470 looking to play short after a break and retest below $5460 targeting $5440 then a break down into $5430
- SPY Key demand at then at $544-545 with Supply above at $553-554
Bullish Sellers trapped above $544 looking to play a break and retest from $545 long targeting $548 then a breakout mid high $550s
Bearish Buyers trapped below $543 after a break and retest below $542 targeting $540s then a breakdown into $539s
- /NQ Key demand at $19250 - 19200 with Supply above at $19600-19650
Bullish Sellers trapped above $19200 looking to play a break and retest above $19250 long targeting $19400s then a breakout back into low $19600’s
Bearish Buyers trapped below $19150 looking to play short from below $19100 then $18900
- QQQ Key Demand at $464-465 with Supply at $475
Bullish Sellers trapped above $464 looking to play a break and retest from $465 targeting $467 then a breakout into low mid $468s
Bearish Buyers trapped below $464 looking to play a break and retest short from $463 targeting $461 then $460s
Have a great day!!
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