No registration required! (Why?)

ES Wednesday 8-12-15

Good morning to all. Tuesday was another weak day with a strong finish. The market was unable to close outside the balance area with a strong come back towards the close. However all of that might have been negated with the weak O/N trade. 2056.75 and the O/N low are the next downside targets followed by 2035. We shall see if the markets can bounce back up or if they are going to meet those lower targets.

Greenies: 2065.5, 2077.5, 2079.75, 2084.75, 2090.25, 2092.75, 2096.75, 2098, 2104.25, 2112.75, 2118.75 and 2123.5

Click image for original size

Profile: We can see that there was good excess on the highs but not the greatest on the lows. The close for the day was the same as the VPOC which was the reason for my earlier comment on the strong finish. There is a relatively prominent POC at 2076. Value was clearly lower with the gap fill. The picture below shows very nicely how the range on 8/10 was rejected. This was a typical setup for a look into range and reject trade.

Click image for original size

On the split profile we can see how the market tried looking into the range of 8/10 in the A and B period but failed to move inside of it. C period was an inside bar and the breakout in D period was another potential setup for a short trade. We see that after J period was unable to take out the lows of the H period, the market rallied back up. If my memory is right, the VPOC was always up there in the 2080 area so the market snapped back to it towards the close.

Click image for original size

Today we shall see how the day goes. The O/N inventory is net short. There was some action initially above YD's close but after the Asia open it was all to the downside. We did not have a test of the O/N mid-pt YD which means that there is a 95% chance we get the test today, so look out for that. The O/N has a double distribution caused by the Asia news so if prices are to move up today we would need that distribution to close. The O/N singles extend from 2071.25 to 2079.75. So if 2071.25 were to be rejected, look for a test of the O/N low at 2053.75. As of now we would open outside YD's range which is very much like the open YD so look for the same trade setup as YD i.e. look inside range and go or reject.

Lastly we look at the weekly profile and we see below that 2056.5 and 2062 are the previous weekly lows that provide a reference. A weekly naked VPOC is at 2050.5 so we have some confluence there.

Click image for original size

Good luck to all.
no success in closing the gap to YD so far. also no test of O/N mid-pt yet
will the 2056.75 level be defended?
the buyers seem scarce today.... 2035 looking likely as panic appears to have set in
lots of single prints all over the place as stops are just being rolled over. this was a fire cracker effect with multiple levels being taken out in a hurry
"Air" between 2055.75 and 2056.75
air filled
The D and E period highs match the A period low to the tick. Do you think that is strong selling and is going to hold?

Click image for original size
also note the higher lows on C, D and E so far
for whatever it's worth...

Central Bank: Yuan will not depreciate further. Exchange rate reaches 6.39 against USD on Wed.

and boom...we hit the stops above that D and E period highs..
well now, wasnt that lovely? closed the gap, got the O/N singles and ended positive on the day. Heck of a rally Mr.Market