Friday 27th September – ES_F Review

Morning all,

Rotational day in the ES yesterday where nice value was built out between 2970-80, relatively weak internals off the open saw a sell-off in D & E periods where we explored under the VAL from Wednesday’s session. Whilst there appeared to be strong initial selling, there was very little in the way of follow through to the downside which is MGI we carry forward. I was of the firm belief we’d test the 2959 area again, but the market couldn’t get close to Tuesday or Wednesday’s low. The market respected the single prints from Wednesday’s J period in that it treated it as two separate distributions, but it was well filled out late in the session.

Overnight we’ve got a mixed bag of inventory, with no clear leaning towards long or short. Late in the globex session we’ve seen some price exploration into the single prints between 90-94 and rejected back out as inventory is beginning to correct itself. We’re slated to open just outside of range and outside of value at the time of writing, so we’ll use A & B periods to allow initial order flow show us the way today.

We’ve had 3 days of big ranges but it’s pretty much a balance zone that we can look at, with the high being 91.50 and the low being 53.75. Given we’re at the top end of this balance zone, rejection at the upside, targets downside exploration. Breaking above 91.50 and gaining acceptance targets the further single prints between 95.50-96.50 (from Tuesday).

We think this market will eventually trade above 3,000 particularly with month end in mind, but there simply isn’t strong enough order flow to move us up in one shove. The market is showing clear indecision at present, so buying & selling at the excesses is often the best way to play this type of market. Expecting more of the grinding price action today, so take a couple of handles of profit is the market offers it to you. Hopefully decisive internals can show us the way.

Good luck & happy trading.