Monday 7th October – ES_F Review

Morning all,

Interesting day on Friday, and it played out in line with what we expected and posted about in Friday’s post. Often it’s useful to look at the weekly or even the monthly profile to see where we are in reference to the longer term, to gauge whether we’re currently trading inside or outside of value, as well as looking for poorly auctioned areas particularly in the middle of the profile value area. We got great internals off the open on Friday, and we traded right up into the 2950’s before the close, whilst closing the gap from Thursday going into Friday, which will give structure to either a move higher or move lower.

Overnight, we’re 100% short, but it’s worth treating M & N period from Friday as price exploration during a settlement period on the week (where a lot of people were short and didn’t want to take home a position into the weekend). 2934-39 built out some nice value on Friday so today we’ll look at that area for a support, but we’re opening in range, and above value, with an overnight POC of 37.25 which is 18 wide which may lend some support.

Today we’ll look for inventory to correct during A & B period and see what direction the market gives us in the run-in to this week. We have some single prints in the M & N period from Friday so we’ll look for acceptance in those single prints, acceptance meaning we spend time there, and transact volume, in order to support a leg higher. Overall, I’m beginning to move into the bear camp, and I think if we don’t get back above 2980 (and stay there for a meaningful period of time) then we explore areas to the downside. Trade today will most likely present itself later in the day, as we’re in the middle of a range here in the longer term so we’ll wait to get to extremes of the balance areas before taking anything on.

Good luck and stay safe out there!