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Good Monday morning!!
Up, up and away we go! Markets broke out of the four day balance to the upside on Thursday and Friday last week, and now this morning, we have a very large true gap well above Friday's high, so new all time highs are in the crosshairs of the bulls once again. As we mentioned Friday...
"For now we have to assume the trend is going slightly back up vs sideways, as we've seen last four trading sessions, Friday through Wednesday. That four day balance has turned to the upside yesterday but it doesn't feel like a lay up that we just go straight back up to new all time highs. There seems to be some caution and hesitation by traders and investors at these levels, but unless the S&P cash breaks back down below 5920, then the bulls are firmly in control! The level to watch in the ES is 5945."
Well that hesitation I thought was in the markets now seems to be in the rear view mirror as this gap puts us back above 6000 in the S&P cash and the buyers are right back at their operations. The key today will be today's low and I can't stress the importance of this enough! Now obviously we haven't even started trading yet so how can I know what today's low will be, however, whatever today's low is in the tape, any price action that stays above that level over the next few days will be edge to the bulls!! Period! And please don't forget we have a shortened trading week with the markets closed for Thanksgiving on Thursday and an early 1:00 PM EST close on Friday!!!
Futures are sharply higher today with a true gap well over Friday's high and overnight inventory is 100% net long. Any price action that stays above the overnight low of 6005 will be edge to the buyers. Upper targets are already being hit and surpassed so use a first 5 of 15 minute low as a gauge of strength. If price stays above the first 5 or 15 minute low (your discretion) then buyers remain firmly in control. NOW if there is a look above and fail above the overnight high which currently sits at 6032.25, then that could be a short signal to balance out the net long inventory.
If price does not take out the overnight high, then there could be a quick liquidation break below the first one minute low of regular trading hours! Please note, however, that this kind of gap is a "reorder of thinking" and one group (those on the sidelines) will be chasing and a second group (the shorts) will be scrambling to cover!!! These things are very powerful when combined together. Futures are trading @ 6026.50 at the time of this writing.
VPOC Update: There were no VPOC's added Friday although 6004, which was above us on Friday, is now below current price with this enormous gap making it now 29 below where current price is trading and that is another new record!
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 6010 - 6020
Key Levels: 6005 Overnight low
downside target is: 5965 - 5955
/NQ upside target is: 21,000 - 21,050
Key Level: 20,928 Overnight low
downside target is : 20,825 - 20,800
/RTY upside target is: 2430 - 2440
downside target is: 2400 - 2390
Economic Data:
Chicago Fed National Activity Index @ 8:30 AM ET
Dallas Fed Manufacturing Survey @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
3-Month Bill Auction @ 11:30 AM ET
6-Month Bill Auction @ 11:30 AM ET
2-Yr Note Auction @ 1:00 PM ET
Treasury Buyback Results @ 2:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Demand GAP UP previous Supply at at $5985-$5605 with Supply at $56020
Bearish
Buyers trapped below $5980 after a pullback below $5975-50 looking to play SHORT targeting $5952 then $5930
Bullish
Sellers trapped above $5985 after a break and retest above $5990-85 playing LONG targeting $6020
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SPY - Demand at $596-597 with Supply above that at $598 HOD
Bullish
Sellers trapped above $596 after a break and retest above $597 looking to play LONG targeting high $598 then high $600
Bearish
Buyers trapped below $596 after a retest from $595 targeting $593 then $591
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/NQ - Key Demand at $20880 with Supply $20980 HOD
Bullish
Sellers trapped above $20880 looking to play long after a pullback holds above targeting $20940 then new HOD
Bearish
Buyers trapped below $20880 and holding below $20850 looking to play short targeting $20770then $20700
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QQQ - Key Demand at $505-506 with Supply above at $509 HOD
Bullish
Sellers trapped above $505 looking to play long from a break and retest at $506 targeting high $507 then $508
Bearish
Buyers trapped below $505 after a break and retest below $504 looking to play short targeting $502 then high $501
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AMZN Key Demand at $197-196 from Friday with Supply above at $199-200
Bullish
Sellers trapped above $196 after a break and retest from $197 playing long targeting high $198s then $200
Bearish
Buyers trapped below $195 after a break and retest from $194 playing short targeting $193 then $192
Have a great day!
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