Monday 23rd September – ES_F Review

Good morning,

Hope you all had a nice weekend. Friday was a really interesting day, and following some initial strong momentum to the upside, we couldn’t meaningfully take out, what’s now become a key level, 3017. The significance of this level was only spotted during some back-testing before the open on Friday, and it corresponds to the high of the Fed Dump retracement on 1st August – it is also the volume value area high of the 2-day balance zone for Thursday 12th & Friday 13th September, and it’s beginning to suggest prices, for now, are not being accepted close to all time highs. It may be signalling that the market has rejected the highs and is now on it’s way to test the lows of this current period of balance. On the chart below, I’ve marked off the gap (purple box) that still exists after the breakout on 5th September, which the market may look to test this week. The blue box corresponds to some short term areas the market may look at over the next day or two.

Overnight, despite some significant weakness since the European open, inventory is roughly 55% net long, and I expect some of that inventory to be already in the process of correcting itself prior to the open in 30 mins. We’re slated to open inside of Friday’s range, but outside of value. In the opening trade we’ll look for any acceptance above Friday’s VVAL @ 2996.25 to see if we gain acceptance – when I speak acceptance, I refer to both volume and time, so for acceptance in this case, any kind of a swift rejection brings in some downside targets. If the overnight low is taken out along with the weekly low of 2980.25, we target 2970 to the downside. To the upside, we have a cluster of VPOC’s around the 3,000 mark which the market may look to test once again.

It’s worth noting, recently the internals have been really mixed, and have dished out lots of head-fakes over the last week or two, so please don’t take trades purely based on the internals looking positive.

Good luck & happy trading