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Good morning and Happy Thursday!
Markets hit another set of all time highs as investors still seem very comfortable deploying capital at these elevated levels. There was a decent liquidation break yesterday which started around 1:00 PM EST, and there was some further selling after the close when TSLA reported some disappointing earnings, however markets this morning are holding up relatively well.
There was a bit of "topping" yesterday as the most amount of time and volume sit well above 4910 in the /ES so there may be some longs "trapped"! This means that as participants bought yesterday and thought the markets only go up and go up forever, no new buyers emerged and the liquidation break brought prices lower. This does not mean a definite top but be on the lookout for further weakness which could cause some "late to the party Charlies" to become very nervous, very fast!
In the profile pic below, I have marked off some very important levels for the day. The upper pink arrow marks off where some traders "could potentially be trapped" and the lower pink line, which sits around 4875 would definitely change the trend and tone of the markets! (Hence it is my downside target area)
Now we are not near those levels yet but if we start taking out overnight lows, which currently sit at 4892, then look for yesterdays lows to be taken at 4889 then target 4875. IF traders and buyers support overnight and yesterdays lows, then the current trend stays in tact and Fantasy land is alive and well!!! Prices which stay above 4910 (which is yesterdays 1/2 back) means that our upper targets would then be in play...upper pink arrow!!
Futures are gapping mostly higher this morning with overnight inventory 100% net long and we are inside of yesterdays range. This means status quo.
And yes, there WAS another new VPOC added yesterday so we now sit with 16 untested points of control below us. I have NEVER seen this before. Think about black or red showing up in Roulette 16 times in a row....the odds of this happening are infinitesimally low!!
/ES upside target is: 4920-27
downside target is: 4880-75
/NQ upside target is: 17,730-750
downside target is: 17,550-540
/RTY upside target is: 1998-2000
downside target is: 1953-50
Economic Data Today:
Durable Goods @ 8:30 AM EST
GDP (Gross Domestic Product) @ 8:30 AM EST
International Trade in Goods and Services @ 8:30 AM EST
Jobless Claims @ 8:30 AM EST
New Home Sales @ 10:00 AM EST
Natural Gas Inventories @ 10:30 AM EST
More Color.......
/ES - New Supply from yesterday at 44940-4920 with demand at $4870-4890
- As long as price is above $4870 I want to buy dips up to play long
- If price breaks below demand then it must act as resistance to play short.
Nearest Demand below that isn't until $4810-4820
SPY - Demand at $482-484 with supply formed yesterday at $488-489. Old Demand
below that is at $477-479 then at $470-$472.
- Sellers at the open pushing price below $482 to play a break / retest short
- Sellers trapped at the open with price holding above $483 to play long
- Buyers at the open trapped after failing to break a new HOD on a pullback
holding below $488 to play a break and retest short target $486 first then $484
SPX - I want to see the Gap filled from last week where Demand is at $4840-4850.
- Break and rest to play long targeting $4860 first then $4875
- I only want to play short if buyers become trapped at supply $4905-$4890 or if
price breaks below $4835 and holds below $4840 as resistance on a pullback.
/NQ - Key Demand formed yesterday at $17590 - $17600 then at $17470- 17430.
- Supply formed yesterday at $17800 $17790
QQQ - Key Demand at $420-422 with Supply from yesterday at $430-428
- Buyers at the open failing to break above HOD pulling back below $428 to play a
break and rest short targeting $426.70 first then $425.50
- Sellers at the open failing to break below $419 to play long form Demand
- New Hod with a pull back flipping supply to demand holding above $421 to play
long targeting a new HOD
Also watching …
AMD Supply flipped to Demand at $176-178 with support and old demand at $170-72
- I ideally want to be playing long after sell offs into key demand, holding above
- If price breaks brow $170 and fails to reclaim above I will look to play short
BA Sell off overnight into the morning with Supply at $218-214. I want to short all failed
rallies either at Supply or $212 where buyers becoming trapped targeting $209 then 206
TSLA Huge Sell off over night that could bring downside momentum to /ES and SPY
- I will be watching intraday price action looking to short from $210-212
AAPL Sell off over night into the AM with Key Demand at $192 looking to play long
Have a wonderful day!
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