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Good morning!!
Yesterday was quite volatile but showed us some pretty good signals that buyers are not as confident as they've recently been. The fact that supply showed up (i.e. sellers) at prior days highs in the /NQ's (Friday January 12th) and only overnight high in /ES indicates that things might not be as rosy as most believe!! Fantasy land might not last forever!!!! (Look at the RUT as well!)
The point is the market has been going up on this kind of euphoric, nothing can ever go wrong state, and it is making me quite nervous. Structurally from our last report we are still in a very large balance area (check out profile picture below) but I would start looking for lower targets if we stay below prior days range!
Futures are down sharply this morning with overnight inventory almost 95% net short, and looks to be on a true gap. Reminder: A true gap is one where the market opens either above or below a prior days trading range and that is important because inventory that is "out of balance" usually needs to correct and "re-balance"! In this case, look for the overnight low to be taken out and if it goes back above the overnight low (currently 4765.75), then there could be a long trade targeting prior days low 4779.50 Stop would be the low and then trail up accordingly. If futures do not take out the overnight low, then the long would be above the one minute high and the stop below the one minute low...then obviously trail stop up if prices move in your direction. The key to today will be if the markets can go back to prior days range and if not, that will be a good sign for the bears.
/ES upside target is: 4820-25
downside target is: 4765-60 (*if lost, then 4750 then 4735 will be key!)
/NQ upside target is: 17,060-070
downside target is: 16,870-860
/RTY upside target is: 1954-56
downside target is: 1925-23
Economic Data Today:
Retail Sales @ 8:30 AM EST
Import & Export Prices @ 8:30 AM EST
FED Board Governor Barr Speaks @ 9:00 AM EST
FED Board Governor Bowman Speaks @ 9:00 AM EST
Industrial Production @ 9:15 *Red Star Event
Business Inventories @ 10:00 AM EST
Housing Market Index @ 10:00 AM EST
FED Beige Book @ 2:00 PM EST
More Color.......
/ES - Key levels for me today are Demand at $4765-4780 with price consolidating inside
over night and pre market. Key Supply from yesterday is at $4800-4805 then $4815-25
- If price can push up and hold above $4807 i will look to play long
- Ideally I want to be shorting pullbacks into supply on break and retest
- Below $4760 gives us more room to the downside to $4740 demand
SPY - Consolidating inside demand at $$472-$474 with it breaking below yesterday
LOD.
- If buyers fail to hold above $474 I would like to play a break and retest short at
$473 targeting a new LOD where Demand flips to Supply
- Key Supply between $476- $478 with a HOD from last week. Buyers at the open
trapped after a break out , pullback and failed follow through to push higher , I will
look to play short from $477 targeting $475.50 first then $474
- Buyers pushing price back above $475 with it holding $474 support playing a
break and retest targeting $476 first then $477..20
/NQ - Bounced from Demand over night at $16780-$16800 with Supply at $17060-25
- Not much Demand below If price breaks below $16750 until $16660-50
QQQ - Bounced from demand at $404-405 demand with Supply at $410-412
- Ideally I want to see buyers fail at yesterday HOD to play break and retest short
- If sellers fail to break below $405 I will look to play long targeting $407
- Strong sell off below $404 with it hold as resistance I will look to play short
AAPL - Gap down over night looking to see buyers fail at $183-184 to play short
- If price can reclaim back above $185 I will look to play long off a pullback
AMD - Consolidating inside supply at $$158- 160 with support below at $156. If bulls
can defend that after a small sell off I will look to play long on a break and retest.
- Key Demand isn't until $151- $150 then below that $ 145-143
Have a great trading day!
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