Friday 30th August – ES_F Review

Morning all,

For those of you who had a tough day yesterday, be kind to yourself, that was a really choppy day to trade given the size of the gap from Wednesday’s close into Thursday’s open. As I mentioned in yesterday’s mailout, market makers were very short coming into the open, and horribly offside – during ‘A’ period, they allowed the market to bid higher for nearly 90 mins, before during ‘C’ period, there was an incredible liquidity break, allowing them to take their shorts down to 2906 for profit. The rally back was incredibly swift which confirmed my exact suspicions, liquidity break from market makers, nothing more. We spent the rest of the day building out value in the mid-20’s before closing in value.

Overnight, we’ve got a big gap again, so use yesterday’s trade as context for today, also consider, today is month-end and the word on the street is that nearly every large fund manager is already on the beach, with the juniors working orders. Take from that what you will.

Early trade today will tell us exactly how the rest of the day will shape up. You’ve got market makers short from last night’s close who’ll want to average in and take this market down towards the green box from yesterday. I’m not saying this will happen, but it’s a possibility. There is the possibility that the market will bid up above 2950 early before the bids get pulled and retail stops get hit. I do not want to be long or short this market at this point in time, so I’ll look for buying opportunities in the upper half of yesterday’s range or in the lower half of the overnight range. As always, $tick, $ADR and $UDVR for trigger entry.

Key levels:

Overnight High – 2946.50

Overnight Low – 2920.50

Overnight 1/2 Back – 2933.50

Yesterday’s RTH High – 2930.75

Yesterday’s 1/2 Back – 2918

Most Previous High – 2947 (from 2 weeks ago, post Fed-Dump)

Previous Support – 2956.25

Let the opening trade take care of itself, and unless something jumps out immediately, I’ll be keeping powder dry until the opening order flow is fully resolved.

Good luck, and stay safe out there!

NB: due to the Labour Day Holiday in the U.S., there will be no post on Monday.