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Value Areas and POC figures for /ESZ7 and /NQZ7 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.
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Double digit gap down outside of yesterday’s RTH range so gap rules apply. Largest overnight move we’ve had in awhile so we’ll pay attention early to see if sellers come in or if it’s the usual buy the dip situation.
2575.50 and 2581.50 will be the two levels to pay most attention to in early trade. The first is the ONL and the second is yesterday’s RTH low. The market will speak volumes depending on how it reacts to these levels. Take out ONL and come back up, take out ONL and drive lower? Rally to RTH low and reject, rally to RTH low and begin to find acceptance within yesterday’s range? Price by itself is meaningless; price relative to context is everything.
Gap rules apply:
1. Go with all gaps that don’t fill right away.
2. Larger gaps will often not fill fully on the first day. Note: although we are gapping 13.50 currently, this is measured from yesterday’s settlement which was at the top of a pretty large range. The true gap is the distance between where we open and yesterday’s low which is only about 4 points currently.
3. If the gap fills and value cannot get to at least overlapping, then the odds of afternoon selling increase.
4. Double digit gaps are harder to trade than smaller ones. It often makes sense to lay back and let things shake out a bit before trading /ES.
On further weakness, the first VPOC below us is the TPO one from 11/2 at 2573.00. Note that the volume POC on this date was traded through but the TPO one was not. The next VPOC down is 2562.00.
Have a nice day
-peter
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