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Good morning,
Well buyers certainly stepped in yesterday to take the markets back up but not before a decent liquidation break first. This was no surprise as overnight inventory was 100% net long and needed to correct first. Once that happened and the European markets closed, buyers came in with force @ 11:00 AM EST and basically bought stocks and futures for almost 3 straight hours! Highs of the day were hit around 2:30 PM EST before some selling came in near the end of the session. We will be looking for more of the same because we said yesterday.....
"As far as the current tone, futures are up sharply this morning and we could be in for some short covering and "buy the dip" operations over the next day or so. One main reason being what we mentioned on Friday as far as targets and levels being hit to the downside.....the 61.8% retracement level at 4975!"
In the profile pic below, the levels show the clear lines in the sand where the bulls or the bears take charge. Bulls are already in control so far this morning with overnight inventory net long and we are in the upper half of yesterdays range. Also, the fact that the overnight lows came right in the single prints and stopped and then reversed higher, is a testament to the buyers back in the fray.
If sellers do come back and take price back below 1/2 back, overnight low and the single prints, then the lower targets should be in play. Breaking back below 5040 only has about a 25% chance of actually happening as of current pricing.
VPOC Update: We actually added a new VPOC below at 5004. We still have 2 above @ 5297.75 and 5151.50 and now 16 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5080 - 5090 then 5105
Key Level: 5041 - 5038 Overnight Low, 1/2 Back and Single Prints
downside target is: 5020 - 5015
/NQ upside target is: 17,520 - 17,550
Key Level: 17,300 - 17,285 Overnight Low and 1/2 Back
downside target is : 17,240 - 17,220
/RTY upside target is: 1990- 2000
downside target is: 1955 - 1945
Economic Data: Light today!
PMI Composite Flash @ 9:45 AM EST
New Home Sales @ 10:00 AM EST
Richmond FED Manufacturing Index @ 10:00 AM EST
More Color.......
/ES - Key Supply at $5100 - 5120 with Demand from Monday at $5005 then at $4975 - 4962. Watching buyers get trapped below $5080 looking to play short.
1. Bears trapped above $4975 after early AM sell off playing LONG from
$4970 Demand targeting Monday LOD at $5005.50 then $5040
2. A break out above $5120 after a pullback holds above $5100 I will look
long
SPY - Key Demand at $492-494 with Supply at $502-504
1. Buyers trapped below $504 looking to play short off a break and retest
targeting $501 first then $500
2. Sellers trapped above $493 playing a break and retest from $494 long
targeting $497.20 then $498
SPX - Key Demand at $4950-60 with supply above at $5082 -5060
1. Buyers trapped below $5060 looking to play short targeting $5038
2. Sellers trapped after early sell off above $4970 looking to play long
/NQ - Key Demand at $17100 - 17136 with Supply above at $17450
1. A failed rally below $17450 I will look to play short targeting $17400
2. A breakout above $17450 and hold as support after a pullback I will look to play long targeting $17500 then 17535
QQQ - Key Demand at $412 -414 with Supply above at $425-423
1. Buyers trapped below $423 looking to play short after a failed rally
targeting $421 then $419.
2. Sell off pre market above $414 looking to play long targeting $416 then
$417
AMD Gap up over night above previous Supply at $149 with Supply above at $152
1. Break and retest holding above $149 I will look to play long targeting $152
TSLA Demand flipped to Supply yesterday at $145-146 with Supply above at $151. Watching for buyers trapped after a failed rally below $145 looking short
2. I would only want to play long if price can reclaim and hold above $147
MU - Gap up inside Demand at $107-108 , Supply not until $112-113
1. Looking to play a GAP and Go long if sellers are trapped above $108
As ALWAYS, have your stops in place!!!
Have a great trading day!
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