May 9, S&P500 Premarket Plan and Missal
When round numbers count.
Image 1. Car display panel
An eventful session on Wednesday after all despite the discount in the electronic session, which was bought back up in RTH to close within Tuesday’s value area. This only served to trap the bears despite the break of daily OTFD. Remember that when inventory is net long or short coming into a session, chances of inventory correction are 75% at the open.
The second is the gap rule. Defense of the gap often means continuation in the direction of the gap. A close of the gap negates the initial bullish / bearishness and can often travel through and above / below the prior day’s range. While the latter didn’t happen yesterday the action still favored the bulls.
Image 2. ES 5m footprint, May 8. Note the lack of selling effort at the open
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Minister’s Missal
Wednesday’s ten-year bond auction did not move the needle on market aside from marking the afternoon low. The session traded on extremely low volume, not the most encouraging sign for buyers above 5200. However the day left a buying tail and a weak low which could see some resolution to the upside.
Image 3. Tuesday RTH to Thursday ETH as of 8h45EST
This brings us into three day balance in a large weekly OTFU and monthly balance. Bulls are still in near-term control. As of writing ETH inventory is mixed, with unemployment claims on the upside spiking prices into PDVAH. Given the tight ranges and participants hugging 5200, my plan for the day has not materially changed and levels remain consistent today. Recall today’s thirty-year bond auction at 13h01EST.
Thursday Plan and Levels
Pivot 5205. Primary thesis is a potential look above and fail of PD weak high to then challenge Wednesday’s buying tail. However volume above PDH could gain momentum especially after 5225 towards upside targets.
a) Bid at 5200, time over pivot and break PDH to test 5225,; a break there targets 5231 to 5241-43. Further above is longer-term resistance at 5255.
b) Break of 5200 on volume targets 5186 (50DMA) and 5179 level of support. Extreme weakness targets a gap fill 5167. Acceptance below the gap would be the big one for sellers, with 5155 NPOC as a potential test of buyer interest.
c) VIX levels similar. Buyers may see upside with the index printing below 13.10 while sellers may see movement above 13.50. Look again for TSLA to gain acceptance over 176 for a retest of 180 after my 170 level held yesterday with a few cents to spare. The BTC 63.5k remains a near-term pivot with further weakness possible below 61k which can gate to 58k. as a near-term pivot. AAPL has gone nowhere (and their iPad commercial is simply awful so I’d love to see this test 178 soon) 184 can be gauged as a proxy pivot for the indices.
Image 4. 4H ES levels
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