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Good Wednesday morning!
The mosh pit continues! The past few days have been challenging but it still seems this market is trying to put in a short term bottom. As we discussed last week, there was a secure low put in on Thursday the 13th and 5559.75 in the ES futures is still untested. We had a nice move up Friday and Monday, but as I said yesterday morning, the close Monday afternoon was a red flag and we got a big liquidation break yesterday as sellers stepped in right from the opening bell. That being said, we still have some very nice clues to watch as today unfolds so fret not. We will figure this out!
Before I get into the key levels and targets for today, you must know that there is a Fed announcement this afternoon at 2:00 PM EST The market is pricing in no change in interest rates, however, there is a Fed Chair press conference at 2:30 PM EST so this will affect volatility and there could be some fireworks when Fed Chair Powell starts talking about the future path of rate changes. According to my latest research, the market is not expecting a rate cut until September at this point.
Now in the profile pic below, yesterday put in what is called a "b" pattern where there was a sharp liquidation break and value built lower. The profile looks like the lowercase letter b. This happens when traders and investors get "over their ski's" a bit (meaning inventory got too long too fast) and the market will correct and shake those people out. These things happen often but the structure created gives us important levels to watch!
In the key levels and targets, it will all be about 5670.50 which is the POC (Point of Control) and 5684 which is the bottom of the spike, and yesterday's poor low at 5651. This area/range is the staging point for the next move, either higher or lower. Now I usually have more confidence in picking a direction, however, with the Fed meeting this afternoon, it is a coin toss! But it doesn't matter which way it goes because we just need to jump on board once we see which group, either buyers or sellers, takes charge!
If buyers can keep price above 5670.50 then take out 5684, we will look for upper targets. If sellers keep price below 5670.50 then take out 5651, we will look for lower targets. It is pretty straightforward today but I am not saying it will be easy. The reason is there most likely will be a lot of chop and false starts and stops ahead of the Fed announcement as traders and investors around the world wait for this important information to be released. Stay alert and stay frosty! Futures are trading at 5681 at the time of this writing.
VPOC Update: Yes, another new VPOC was added yesterday but this time it was above at 5633. We now have 8 above and 27 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5725 - 5735
Key Levels: 5670.50 POC 5684 & 5651
downside target is: 5640 - 5630
/NQ upside target is: 19,910 - 19,940
Key Level: 19,698 POC
downside target is : 19,475 - 19,450
/RTY upside target is: 2100 - 2110
downside target is: 2055 - 2045
Economic Data: RED STAR EVENT : FOMC DAY
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 (Preliminary) @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
FOMC Announcement @ 2:00 PM ET
Fed Chair Press Conference @ 2:30 PM ET
Treasury International Capital @ 4:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5640-50 with Supply above at $5690
Bullish : Sellers trapped above $5690 looking to play a break and retest above $5700 long targeting $5730 then $5758
Bearish Buyers trapped below $5640 looking to play short after a break and retest from $5635 targeting $5610 then a break down into $5587
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SPY - Key demand at then at $558 then Supply above that at $562 then at $565
Bullish Sellers trapped above $562 looking to play a break and retest from $563long targeting $563 then a breakout mid high $564
Bearish Buyers trapped below $559 after a break and retest below $558 targeting $557 then a breakdown into $556
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/NQ - Key demand at $19590 then at $19460 with Supply above at $19760
Bullish Sellers trapped above $19760 looking to play a break and retest above $19800 long targeting $19890 then a breakout back into low $20000
Bearish Buyers trapped below $19590 looking to play short from $19350 targeting a breakdown $19200s into then new LOD at $19138
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QQQ Key Demand at $473-472 with Supply at $476 then at $480-481
Bullish Sellers trapped above $476 looking to play a break and retest from $477 targeting $479 then a breakout into low mid $480s
Bearish Buyers trapped below $472 looking to play a break and retest short from $471 targeting $469 then $468s
Also watching
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TSLA - Key Demand at $222 then at $225-226 with Supply above at $238
Bullish - Sellers trapped above $238 after a break and retest from $239 looking to play LONG targeting $241 then a breakout into $2452
Bearish - Buyers trapped below $238-237 after a break and retest from $236 below looking to target $232 then a breakdown into $230
Have a great day!!
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