Wednesday 25th September – ES_F Review

Morning Traders,

First off, apologies for lack of review yesterday, we had some issues with the data feed so our charts weren’t printing properly. This week has been very interesting as it’s really trying to find out if there are any serious buyers or sellers in the market currently. We topped out at a very significant level @ 3017 which was the retracement high of the fed dump on 1st August, and failed to stay above there for any significant length of time. We’re in the process of now printing a new balance zone which should be between 2945-3030 – we’ve failed at top, now we move to test the bottom (if we can find any sellers!).

Yesterday, amid concerns around an impeachment enquiry, the ES sold off significantly in what was a trend day down – once we broke the weekly of 2980.25, new sellers were attracted which pushed the market down, trading to 2958.50 as the low of the day. After failing at the top of this range, testing this area is good for the market overall, as when price broke above 2945, it’s never come back to retest. This will strengthen the market significantly into the longer term as any moves higher will be built on good structure of well auctioned prices.

Overnight, we’ve had mixed inventory, probably leaning towards the short side. Today, I have to really check myself and wait for confirmations before doing anything, as I’ve arrived with a massive short bias. I think this market has further to go to the downside, and I can see a test of 2940-45 (bottom-top of the gap). We’ve opened in range and in value, however at the tail end of A period we’re starting to sell-off somewhat. Once A & B period are fully printed, I will look for opportunities to get short on the back of any decent rally back towards last week’s range, provided the internals fully support it (delta isn’t that bad at -8000, considering we spend most of yesterday below -30,000). To the downside, I will look to be a buyer at the bottom of the gap, but will wait to see how price reacts to that zone before doing anything.

It is worth noting that after big trend days, the following day is often a balance day where buyers & sellers agree on price. This is something which may happen today, and C & D periods should point us in the right direction if this is to be the case.

Another point to consider, is that Monday is month-end, and for trades to count when closing the books (particularly for institutions) they’ll need to settle before the close tomorrow. Consider this when getting into any positions, that this market could get taken back above 3,000 in a whisper.

Good luck & happy trading.