Image 1. Crossing 5200 ES. Strorseisundet Bridge, Norway
In yesterday’s post I opened with a coy question in the subtitle, “Are we still friends at 5200?” It was interesting to see the answer play out today - a tentative yes.
This was the third consecutive gap open and buyers have been clearly in control. Responsive sellers were not able to close the gap out of the gate, usually a sign of buyer strength. A follow up of the prior two sessions. My main target for buyers was the 5221 LVN with repair of poor structure above, but despite shyness at the open this is where strong passive sellers emerged.
Long story short, the gap closed albeit later in the day on an uneventful range day. Recall from the Tuesday plan notes, “My primary thesis at this point is a look above and fail into a balanced session, unless LVN 5221 is broken on momentum.”
Exactly what Tuesday gave us!
Image 2. SPX daily candles; doji, a star? You tell me.
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Minister’s Missal
Sellers have tipped their hand above 5200 with their strong passive presence, along with buyers with the low volume follow through above this key longer-term level. Sellers could be easily overwhelmed with enough demand however 5225 may prove a tough one to crack. Despite the tight opening range on Tuesday, the IBL of 5210 may provide clues into Wednesday’s session - a solid location for a pivot.
Image 2. Tuesday ES 5m footprint, failed breakout
Buyers’ goal is the repair of singles above to 5231, and the next make or break for the ATHs is very likely at 5250. It is no surprise to see the market rest - balance - after the impressive run from the lows, especially at the critical 5200 psych level, and in fact this was my primary thesis into the session. But the more time we spend above 5200, the more higher prices will be accepted, so it is in the sellers’ court to initiate mid-week.
Never short a dull market. The data-light week has given us that, aside from the 10-year auction Wednesday at 13h01EST which may see some movement. If the ETH session remains dull, we may possibly expect that to carry into the afternoon’s auction. Regardless, keep your stops tight on a day of churn; it is often better to sit out the market entirely.
Remember your first goal is capital preservation, growth comes later.
Wednesday Plan and Levels
Pivot 5210. Plan is mostly unchanged. Primary thesis is once again balance, especially in the first half of the day, unless 5225 or 5202 are broken (or opened above/below) on momentum. Responsive selling at the SPX 5200 level (roughly ES 5227) did not see follow through, necessary for the bearish thesis.
a) Bid may be found at 5200 for attempts at 5220-27; a break of this zone targets 5231 to 5241-43. Further above is longer-term resistance at 5255.
b) Time below pivot and break of 5200 on volume targets 5186 (50DMA) and 5179 where support may come in. Extreme weakness targets a gap fill 5167, with 5155 NPOC a further level of interest.
c) VIX continues to give way. Buyers may see upside with the index printing below 13.10 while sellers may have the edge above 13.90. TSLA is out of commission until 180 is reclaimed, 176 is a critical level to hold or a trip to 170-72 may be in order. The BTC case remains with over 65.2k setting up a test 67.6k - keep an eye on 63.5k as a near-term pivot. Finally AAPL 183.90 may be a pivot proxy for the indices.
Image 6. 4H ES levels
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