We had issues with our data overnight following trying to roll from U contract to Z contract, which has resulted in us staying in U contract for today – volumes are comparable between the two contracts for now. We’ll probably stick on U today and complete the roll over the weekend – levels we mention here will be based on the September (U) contract.
Overnight we have inventory that’s almost 100% net long, and has already corrected off the open, tagging yesterday’s close – there is no motivated big sellers down there after watching the price action test the zone twice over the last 30 mins.
Today, we’re mainly focused on trades to the upside as we’re in line to test the all time highs, 3030 on Sept, 3032 on the December contract. We have opened on strong breadth, ticks are solid (above 0) and the advance decline line is positive, unless things change significantly, we’ll only be looking at buying pullbacks. Given we had a strong day yesterday, after Wednesday’s rally, this new zone is well confirmed and any attempts to push the market lower have been bought with conviction.
Remember, Wednesday’s trade settles today so T+2 references come into play – ultimately we’ll want to hold Wednesday’s close at 3002.25. There are some single prints below Wednesday’s highs at 2997, and 2989.25 – these could be some good references if we get into Wednesday’s range.
Given our lack of data overnight, it has meant our preparation has been tapered, so our commentary is unfortunately quite light today.