Jan 9, ES Premarket Missal: Deep Breaths

Back to the future.

Image 1. Points delivered. There Will be Blood (2007)

This past Friday I led into the Missal with another film…no surprise. This time a scene from the Treasure of Sierra Madre - an excellent film by John Huston. The suggestion that gold miners headed south to make a fortune, and then lose it all, played out yesterday. Not just losing, but breaking the year’s opening price. Here is an excerpt from the writeup:

We saw that ‘easy turn’ with the 100 points nearly delivered on one session. And a very remarkable one at that as 50 points were made from the open with extremely low volume (approx. 600k contracts to 50 points in RTH by my screen). I could not find a similar example in 2023, share one if you have one in the comments below.

Image 2. ES turnaround. Friday RTH and Monday ETH, RTH sessions

Minister’s Missal

There was not much nuance in Monday’s session. A relentless OTFU from an open drive off of Friday’s POC. There was barely an looking back as a retest of the weekly pivot 4756 from above saw two major weekly target taken out above to 4796 with some overshoot to 4803. For many, this was an extremely difficult day to trade as there were precious few moments to lean against a level. This may suggest that the selling off the beginning of the year was rather weak as sellers could not stomach a defense.

In fact very little volume was present as mentioned above. This in itself in an anomaly, reinforcing the bias to a ‘buy the dip’ scenario at this time. Monday left us with five distributions in an extremely thin profile, and as many sets of singles. As we are back to Friday’s pivot 4796 we will use this for today’s session.

Image 3. Monday ETH and RTH and Tuesday ETH as of 8h15EST, ES

Tuesday Plan and Levels

Pivot 4796. Sellers will look to fill singles from the prior session challenging extremely thin volume. Their success of failure early on will show their hand, and personally I lean to support being found around 4765-70 as of writing. This is subject to change with new MGI as we head into open. Overall I think a balance session is in order after the extremely rapid move on Monday.

a) Buyers defending singles to 4772 will aim for an hourly close over pivot, where sellers may choose to defend. A successful break here can challenge 4808, with singles at 4824 to balance area VPOC 4835 above, where we can expect more selling.

b) Sellers keeping pressure below pivot target a fill of singles as mentioned above. Furhter below is Monday TPOC 4763 where buyers may again step in. Any failure here signals very weak buyer presence, with further target at 4744 Friday VAH. This is my line in sand (LIS) level for the buyers at this juncture.

c) Now for proxies. The VIX under 12.80 can support the case for a run at new highs, while sellers want to see the index reclaim the 13.60 mark. For stocks, AAPL is a great proxy, last week I mentioned that this did not want to see 180 go and this level held nicely. Strength over 185 can translate into strength for this indices as well - similarly for TSLA above 241.

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