May 21, S&P500 Premarket Plan and Missal
Headhunters.
Image 1. ES Monday RTH to Tuesday ETH as of 8h32EST
Monday took many off guard as the opening push led to a near run of the ATH by three ticks. Large bids were present on tape which seems to initially suggest a break of the highs, but tempo slowed noticeably and crowded the long trade. This led to a mini-liquidation after lunch, finishing with a double distribution day at the close.
Unlike the prior Thursday which has nearly the same price action, sellers were not able to initiate lower into the close, this time through 5328. This will be an important level to watch for support on Tuesday, and an excellent pivot. Note that this is nearly unchanged from Monday’s pivot. As we now in a four day balance zone, the levels remain consistent, with some tweaks. Read below for today’s possible layout.
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Minister’s Missal
Another sleepy overnight session as of writing, with inventory [now net short as of writing]. The 5337 LVN of Monday’s double distribution has capped prices in ETH, and this will be a critical level for buyers to overcome early on for retests of the highs. Consider it like a secondary pivot once / if we close above, although I will once again focus on 5328 for today. And in between is the balance POC which has moved up to 5333 - I expect a potentially slow session around these levels (yuck tight range, don’t get chopped) in advance of FOMC minutes and NVDA earnings Wednesday.
Again, eyes on the weekly pivot 5304 below. Buyers would look to defend 5320 and indeed some shorts trapped in this area may initially cover, lending support. The key for lower is to look for volume leading into momentum. A fast tape is an intraday trader’s best friend.
Image 2. ES daily profiles
Tuesday Plan and Levels
Pivot 5328. This is the M period low as well as a level of particularly heavy interest on the tape. Estimated range 25 points with a possible 5-10 point extension.
a) Support of pivot early on, break of ONH and a close over 5342 which can try for a break of 5350 once more. This can open 5359 where sellers are expected to defend; 5376 further above.
b) Defense of pivot and volume below 5320 aims for the buying tail at 5310 and weekly pivot 5304 which buyers are expected to defend. Further weakness targets 5291 and seller strength a gap fill of 5275.
c) We could potentially see some more volatility today with VIX ticking up, although sellers would likely need to see this over 12.80 for downside momentum. Buying favored with prints below 12.15. A ‘proxy pivot’ can be AAPL at 190.75. Note that 190.50 worked well yesterday, supporting early buying!
Image 3. 4H ES levels
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