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Good Tuesday morning!
The bounce held like a champ and continues as the market closed well above 5760 in the ES and above 5700 in the S&P yesterday. This was key for continuation. We also hit upper targets and took out the VPOC at 5822.50. Yesterday's high was 5825.50! As mentioned previously, shorts are trapped below and are in even more pain today.
This morning we have another true gap higher which means we are opening above yesterday's high. True gaps lower, of course, are when the market opens below a prior day's low. This gives us a lot of market information, and when this happens, you need to ask yourself; Who is happy? Who is sad? Who is making money and who is losing money? This gives you data which lets you know which side of the trade you most likely want to be on!
In the profile pic and key levels below, it is very straightforward for today. Any price action that stays above yesterday's high at 5825.50 is the most bullish scenario, so if this happens, look for upper targets. It does not mean it will go straight up from the opening bell, however that is the path of least resistance.
A pullback to the POC is OK and also bullish. It is what we call "Runner's tagging up." Remember the POC (Point of Control) is where the most amount of volume traded yesterday, so a lot of business was transacted at that level, so traders and investors feel comfortable being long the market as long as price is at or above that level of 5814.
If sellers came in and even took price down to 1/2 back and the VAL (Value Area Low) at 5800, I would still be looking to buy that dip. Only if price gets below the top of the spike, with a confirmed close well below that and lower targets taken out, then the fate of the bulls would be in question. Futures are trading at 5826 at the time of this writing.
VPOC Update: A new VPOC was added below on Monday at 5672, and 5822.50 was taken out above, so we now have 6 above and 22 below. N.B. The number of VPOC's below had to be corrected because when the market dropped 10% from the February highs to the March 13th lows, 6 VPOC's were taken out during that down move, and I forgot to take them off the list. Apologies for the error.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5845 - 5855
Key Levels: 5825 Prior High then 5814 POC
downside target is: 5785 - 5775
/NQ upside target is: 20,535 - 20,565
Key Level: 20,409.50 Prior High then 20,376 VAH
downside target is : 20,285 - 20,255
/RTY upside target is: 2130 - 2140
downside target is: 2110 - 2100
Economic Data: Busy Day Red Star Event
4-Week Bill Settlement
8-Week Bill Settlement
4-Month Bill Settlement
Case-Shiller Home Price Index @ 9:00 AM ET
FHFA House Price Index @ 9:00 AM ET
John Williams Speaks @ 9:05 AM ET
Consumer Confidence @ 10:00 AM ET
New Home Sales @ 10:00 AM ET
Richmond Fed Manufacturing Index @ 10:00 AM ET
Treasury Buyback Announcement (Preliminary) @ 11:00 AM ET
4-Week Bill Announcement @ 11:00 AM ET
8-Week Bill Announcement @ 11:00 AM ET
4-Month Bill Announcement @ 11:00 AM ET
6-Week Bill Auction @ 11:30 AM ET
2-Yr Note Auction @ 1:00 PM ET
Money Supply @ 1:00 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5720 then at $5750 with Supply above $5820 HOD
Bullish : Sellers trapped above $5720 looking to play a break and retest above $5730 long targeting $5775 then $5820
Bearish Buyers trapped below $5710 looking to play short after a break and retest below $5700 targeting $5670 then a break down into $5650s
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SPY Key demand at then at $558 then $564-566 with Supply above that at $574-575
Bullish Sellers trapped above $564 looking to play a break and retest from $566 long targeting $568.55 then a breakout mid high $569s
Bearish Buyers trapped below $564 after a break and retest below $563 targeting $561 then a breakdown into $559
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/NQ Key demand at $19970 - $20000 with Supply above at $20380
Bullish Sellers trapped above $202000 looking to play a break and retest above $20150 long targeting $20200 then a breakout back into low $20300s
Bearish Buyers trapped below $19900 looking to play short from $19875 targeting a breakdown $19700s then $19650s
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QQQ Key Demand at $481 then at $484 with Supply at $491
Bullish Sellers trapped above $484 looking to play a break and retest from $485 targeting $487 then a breakout into low mid $488s
Bearish Buyers trapped below $483 looking to play a break and retest short from $482 targeting $481s then $4479s
Have a great day!!
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