Thursday 5th September ES_F Review

Morning Traders,

Fairly big move overnight during the Globex session, something which is becoming all too common these days – it’s worth noting, this is why we trade futures, as you can trade almost around the clock!

Yesterday was a really choppy day and difficult price action to dip into – I had roughly 8 scratched trades as I don’t have the patience to sit in it for hours on end. The poor high at 2939 was a real tell as we went into the close, and the futures took the ball and ran with it. The context is that we’ve broken out of a massive balance range (of c.120 handles) which we’ve been stuck in for 6 weeks.

There is some big money that’s now offside, so we’ll wait and see this morning how the market digests the overnight order-flow – we have a 30 handle gap to the upside so we’ll need to see how the open prints before making any proper trading decisions. There are a couple of scenarios which may play out – the first is that we open and go higher and then reject lower. The second is we open and go straight down as the inventory corrects. There’s a third scenario where the market melts up and the buying becomes quite emotional, but I don’t see that as being a high-probability outcome.

The key levels for today are the overnight high 2971.25, an untouched VPOC at 2961.75, the overnight half-back at 2954.25 and the balancing range high at 2947.25. There are some single prints from 1st August between 2970.75 & 2979.75 which the overnight trade rejected out of.

Given that we’ve been in a balanced zone for so long, and we’ve now broken out of it, I’d take any trade today with caution or maybe consider dialing back on the size.

Good luck, and happy trading!