May 17, S&P500 Premarket Plan and Missal: FlOpex
Yowzza! Yowzza!
Image 1. Jane Fonda taking a break. S. Pollack, They Shoot Horses Don’t They (1969)
This is the second time I have featured this film of a marathon / endurance game popular during the depression. People subject to exhaustion, hallucinations, even medical emergencies while enduring grueling games of last-man-standing were the entertainment for others. Sound familiar?
Well there is another game of endurance today in the form of opex, as theta wears down while dealers make sure their pockets are as lined as possible. Today can be tricky as we churn or bolt toward strikes of max pain. Some quick notes ahead of the bell.
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Minister’s Missal
I’ve been mostly standing aside, letting others do the work of ‘finding the top’ if there even is one at this time. My primary thesis on Thursday was balance of around 25-30 points into the session, and this is what we got - with one tick over. Not bad after a frenzic (yep that word’s made up) break into a new ATH.
Today I am expecting more of the same - unless 5300 if broken in which case we may see a 10-15 point extension. Sellers were most certainly present on the tape in Thursday’s session, as evidenced by the price action and the delta in the image below.
Image 2. ES daily profiles into the ATH
Note the poor high and the gap below, both important references, as well as the 5300 psych level. Today’s pivot will move slightly up to 5335 - the area of afternoon resistance. Note that Thursday’s 5330 pivot worked splendidly as this was the IBL. As of writing the overnight (ETH) shows mixed inventory in a tight range as players position into opex. Watch the ONL and Wednesday’s LVNs - especially as 5309 - for early support. It’s a good time to point out that session’s overall poor structure, a result of a quadruple distribution day. Talk about short covering.
Image 3. Thursday' RTH to Friday ETH as of 8h35EST
Friday Plan and Levels
Pivot 5335. The 5318 may be a frustrating level for many today, if this turns out to be the case I will explain on the weekend note.
a) Early defense of 5309 can see resistance at the pivot in case of open below 5330. Further on is 5347 to 5364, another zone of likely passive selling. I wouldn’t expect price to break this zone however 5379 is an extreme target.
b) Defense of pivot and a break of ONL aims to clean up structure to 5304 - where buyers may support. Further targets are the buying tail at 5290 where buyers are likely to defend. Mind the gap to 5275 in case of extreme weakness, a less likely scenario in my view.
c) I expect VIX to be subdued, however sellers can see some advantage with prints over 12.75 once again, and buyers favored below 11.90. TSLA is building a decent shelf, volume over 175 can see movement back to 178-180 so consider that a pivot. Sellers look to break 172 to target the 168.50 node. Finally, BTC 67k is once again the pivot for trade to 70-72k, with sellers likely encountering buyer support at 64.4k, with 62.5k further below.
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