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Good Monday morning!
We hope you all had a great weekend! There are some potential storm clouds on the horizon as futures are lower today on the back of huge up moves Wednesday after the FOMC announcement, and a big chase higher on Thursday! Looks like traders got exhausted chasing that move higher and after Fridays pullback, looks like some longs could be trapped above!!!!
WOW! Could it be?!?! A well deserved move lower after crazed, euphoric chasing anything and everything that moved in the markets?!?!
Well it's possible but lets not get too excited too soon! We know how this market gets continually propped up all the time so lets see what the next few days brings us.
We still have the poor structure from Wednesday and now with the gap below Friday's low of 5289, there are definitely some nervous traders who bought Thursday and even some who bought Friday, hence trapped longs!
(Also, we put a new VPOC above current price....more on that in a sec!)
We had a poor low and a poor high on Friday so there are some mixed signals which is why I was saying lets not get too excited too soon. Meaning we have some signals pointing lower yet the poor high and lack of excess high on Thursday might need to be repaired!
However......and this is KEY!..... if this indeed was the top and a short term high at the very least, and we will have a correction on the horizon, then I would use the entire ranges of Thursday and Friday as the excess high!!!
Meaning, yes we can put those two days "together" and think of them in terms of one day...5322.75 is the high and 5289 is the low!!!! And what I mean is IF we stay below Fridays low and keep a gap above us, then this would be a key signal for the bears!!!
Please pay attention to the profile pic below as it shows where the key lines in the sand are located! You can see where I labeled "Longs trapped" are the highs and lows of the Thursday and Friday ranges. This is what I meant when I said think of those two days as one! With futures lower this morning along with a true gap beneath Friday's range, there could be a piling on effect to the downside.
Now that being said, overnight inventory is 100% net short so there could be some fade higher to correct the overnight inventory and Fridays low is the potential target. If they don't even take it back up to Fridays range, then this is a great sign for the bears. If they do prop it back up and take it above the poor low, then look for the poor high as the next target higher.
STOP THE PRESSES!!!!! VPOC update:
We actually put in a NEW VPOC ABOVE current PRICE!!! WOW! We now have one above @ 5319.25 and we still have 22 untested points of control below current price! This is the first time in weeks, if not months, that we have put a VPOC above current Price!
WHY IS THIS IMPORTANT AND WHY DO I EVEN TALK ABOUT THESE THINGS?!??! Because it is telling us that traders and investors are now showing their hands that they think prices have gone high enough...at least for now! So that means get more defensive if you are long and look for more short opportunities if you have been waiting for the right time!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5315 - 5320
Key Levels: 5289 Poor Low Friday
downside target is: 5270 - 5265 then 5250
/NQ upside target is: 18,645 - 18,675
Key Levels: 18,500 Friday Low
downside target is : 18,485 - 18,455
/RTY upside target is: 2110 - 2115
downside target is: 2078 - 2070
Economic Data:
New Home Sales @ 10:00 AM EST
Dallas Fed Manufacturing Survey @ 10:30 PM EST
More Color.......
/ES - Key area of Demand at $5225 - 5250 with Supply above at $ 5230-5310
- Sellers trapped at the open failing to break below $5220, I will look to play long after a break and retest from $5240 targeting $5260 first then $5280
- Buyers trapped at the open looking to play short after fail to break above $5310
- If price can break below $5215 I would look short targeting $5180 then $5160
SPY - Key Demand $515- 516 with Supply above at $524- 523
- Sell off at the open above key Demand looking to play a break and retest long from $518 targeting $520 first then $523
- Buyers fail to break back above $523 after a rally I will look to play short
SPX - Key Demand at $5225 - 5235 with Supply at $5261- 5250
- First I am watching to see if bulls can defend above $5220 to play long
- Below I would look for a pullback after a breakout below targeting $5200
/NQ - Selling overnight with Demand flipping to Supply at $18560- 18500
- Looking for buyers to fail to break back above $18500 I will look to play short targeting $18430 first then $18380 that was previous supply flipped to demand
QQQ - Key Demand at $441 - 443 with Supply above at $446-448
- Bounce at the open inside key demand waiting for a Pullback to play long
targeting $445 then $447
- If price can break and hold below $441 I will play short after a retracement break and retest where Demand will flip back to Supply at $442 targeting $440 & $ 438
AMD Consolidating inside key Demand LOD at $172 -174 with Supply above at $182
- I would like to play long if Demand can hold after a bounce from $172 targeting $175 first then $180. Bounce at the open failing to break $180 I’ll look short
NVDA Key area of Demand at $908 - 910 with Supply at $955 - 950
AAPL Key area of Demand at $170 with Supply at $173
- I would only like to play short if price can break and hold below $170
TSLA Key area of Demand at $165 prior GAP UP with Supply above at $173 - 171
As ALWAYS, have your stops in place!!!
Have a great day!
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