Jan 3, ES Premarket Missal: OTFD
Back to the future.
Image 1. Mass Media. Business Insider 01/03/24
Minister’s Missal
Acceptance lower. This was the theme of yesterday’s session as ETH managed to see the open break the previous week’s low - and with it nine weeks of OTFU. While this may not put the buyers on the back foot yet, it puts the weekly timeframe into balance and the daily into OTFD. Despite the headline above, this could be the beginning of an overdue correction in one of the most aggressive moves in the indices I have witnessed.
I was leaning short into the session, with thoughts to test the 4750 area. This did not manifest but these ideas often play out over a session or two. Tuesday’s RTH open saw buyers struggle to make progress into the opening gap and sellers initiated through the ONL. However their interest to pursue lower prices waned as buyers defended the IBL. This made for a correction through the open and into the opening gap. The problem for intraday buyers came with a failure to make any progress above the PDL.
This was a great location for a short (and a point from our day pivot 4796), risking above 4800. This aligned with my thoughts before the open, although taking a little longer to play out than expected. However if there is no new market generated information (MGI) during the session plans remain valid.
Image 2. Personal premarket notes
Despite a second attempt at initiation be sellers than made a NLOD, buyers stepped in at the Dec 21 VAL. In retrospect this was significant as the ‘buy the dip’ session for new ATHs achieved later. I did neglect stronger consideration of this zone but this is why daily review is important.
Buyers managed a close above open although this was off of a strong inventory correction in M period. That spike high of 4788 will be important as an intraday pivot going into Wednesday’s RTH as a gauge of true buyer intent.
Image 3. Seller exhaustion and inventory correction into close, ES Jan 2
Image 4. Tuesday ETH and RTH and Wednesday ETH as of 8h45EST, ES
Wednesday Plan and Levels
Pivot 4788. Some overnight weakness as of writing with the European open rejecting a reclaim of prior day closing levels. Rallies may potentially be sold. Watch the ONL/PDL for seller initiation which can open lower targets mentioned in Tuesday’s plan. Buyers want to see a traverse of prior day VA while sellers aim to effect a rejection of PDVAL. Plan levels largely unchanged.
a) Buyers defending ONL can target pivot. A close above can see PDH 4797 to 4803 where sellers may step in. Further above are 4813 and weekly pivot 4825.
b) Sellers defending 4777 aim for a break of ONL/4764 to target 4748 where patient buyers may step in. In case of further aggression, we could see a fill of singles at 4736 or an attempt into poor structure at and below 4726.
c) I have adjusted my key level on VIX to 14.30, with aggressive sellers wanting to see prints above. Buyers would want to see a return under 13.70 to gain traction for targets above 4800. AAPL may be key for broader market sentiment, with 185.60 as an intraday pivot. Prints below 184 can see a more aggressive sell in the indices. Interestingly TSLA made little progress on Tuesday’s session and levels remain valid - 247.50 can act as a pivot, with buyers targeting 253 above, and sellers 241.50 and 240 below.
Tip jar - support my continued work!
Your support and comments are appreciated. I do my best to respond to everyone in a timely way. Be sure to follow me @reverend on X (Twitter) for the latest updates!
Don’t maintain bias in the face of contradicting information! Capital preservation is key.
This is not investment advice and I am not a qualified licensed investment advisor. All information found here, including any opinions, commentaries, and suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here. As always, conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.