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Good Thursday morning!
As the warning sign above reads.... Volatility Ahead..... that's going to continue into the foreseeable future. Markets once again showed huge volatility yesterday as after the initial sell off, there was another huge buy off the lows, just like we saw on Tuesday. A big rip to the upside yesterday culminating in over a 120 point range in the ES and over 500 point range in the NQ futures. Traders and investors around the world continue to try to parse the data that seems to just never stop, coming out of Washington DC, as well as other countries and central banks around the world, all trying to show their dominance on the world stage. All of this leads to increased volatility and much larger ranges, and as you will see in a moment below, even our target areas have expanded quite a bit. This happens folks when volatility (VIX) goes from 14 to 24!
In the profile pic and key levels below, you can see we are close to overnight lows and the VAL (Value Area Low) and unless the buyers can step in again like they've done the past two days, then sellers could take this much lower. Today however, we have already hit our lower target areas in the overnight trade so I am looking for a move higher.
NOW PLEASE UNDERSTAND...I do not have a crystal ball and I am not saying I know this with 100% certainty, but the fact that the SPX has hit the 200 day moving average and held so far, I think this is giving some traders and investors the courage to step back in after a quite large 6% drop in the markets since the all time highs almost two weeks ago!
If buyers can keep price above the overnight low at 5769 and then take out VAL at 5790.25, then we could see price move higher to 5810 then 5825 would be next stop. If that level gets taken out then I will be looking for 5851 which is the POC (Point of Control). Upper targets would be last. But please remember, everything hinges on 5790.25 and 5769 holding!!! IF these things do NOT play out then I will not be looking for a long trade!!! Now if the sellers keep it below 5790.25 and then take out 5769, I would be looking short for 5750. 5769 will also be very key once the opening bell rings so stay alert. Futures are trading @ 5779 at the time of this writing.
VPOC Update: No new VPOC's yesterday so we still have 5 above and 27 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5875 - 5900
Key Levels: 5790.25 VAL then 5810 1/2 Back
downside target is: 5770 - 5750
/NQ upside target is: 20,850 - 20,900
Key Level: 20,373 VAL
downside target is : 20,355 - 20,305
/RTY upside target is: 2125 - 2135
downside target is: 2070 - 2060
Economic Data: BUSY
6-Week Bill Settlement
Challenger Job-Cut Report @ 7:30 AM ET
International Trade in Goods and Services @ 8:30 AM ET
Jobless Claim @ 8:30 AM ET
Productivity and Costs @ 8:30 AM ET
Patrick Harker Speaks @ 8:45 AM ET
Wholesale Inventories Preliminary @ 10:00 AM ET
EIA Natural Gas Report @ 10:30 AM ET
3-Month Bill Announcement @ 11:00 AM ET
6-Week Bill Announcement @ 11:00 AM ET
6-Month Bill Announcement @ 11:00 AM ET
3-Yr Note Announcement @ 11:00 AM ET
10-Yr Note Announcement @ 11:00 AM ET
30-Yr Bond Announcement @ 11:00 AM ET
4-Week Bill Auction @ 11:30 AM ET
8-Week Bill Auction @ 11:30 AM ET
Christopher Waller Speaks @ 3:30 PM ET
Fed Balance Sheet @ 4:30 PM ET
Raphael Bostic Speaks @ 7:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5740-50 then at $5830 with Supply above at $5860-70
Bullish : Sellers trapped above $5830 looking to play a break and retest from $5835 long targeting $5885 then $5900
Bearish Buyers trapped below $5830 looking to play short targeting $5805 then a break down into $5790s
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SPY - Key demand at $577-579 with Supply above at $585
Bullish Sellers trapped above $585 looking to play a break and retest from $586 long targeting $588 then a breakout into $589
Bearish Buyers trapped below $580 after a break and retest below $579 targeting $578 then a breakdown into $577s
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/NQ - Key demand at $20550 with Supply above at $20750
Bullish Sellers trapped above $20550 looking to play a break and retest from $20600 long targeting $20750 then a breakout into $20795
Bearish Buyers trapped below $20550 looking to play short from $20500 targeting a breakdown into $20475 then $20390
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QQQ - Key Demand at $487-488 then at $496 with Supply above at $499
Bullish Sellers trapped above $499 looking to play a break and retest from $500 targeting $502 then a breakout into high $503-504s
Bearish Buyers trapped below $499 looking to play a break and retest short from $498 targeting $496 then $495
Have a great day!!
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