Coming into this morning, I really thought today would be the day for some downward movement after 9 straight days of up closes. There was Claims, PPI, and the quarterly Current Account economic data to set the tone. Claims were down, PPI in line with expectations, and the Current Account dropped $1B. Thus the data came in slightly bullish. Ok… so the bulls had some data to get excited about. However the cash S&P is coming into some major resistance starting at 1561.50 which would be hard to push through and should provide at least an initial bounce creating a down close for today. What I didn’t foresee was was a low volatility day and a 5 point ES range on the day before quadruple witching. Thus even though the cash 61.50 did hold, there wasn’t enough volatility to go anywhere.
Volume was higher than recent days (most likely because of tomorrow’s quadruple witching), and the institutional sellers looked like they were finally going to move price down about an hour after the cash open. A good short opportunity looked like it was unfolding but then the buyers came in and elevated the ES to new highs before the sellers came in strong again turning the bar into a potential mouse trap. On a lower 4PF time frame, price double topped and the institutional selling was evident. To get any significant movement down, the ES would need to clear the R1 pivot area and break the short term up trend which started yesterday morning. Both happened and the institutional sellers jumped on and price started moving down fairly quickly until it reached the DTG 49 level where it bounced from what became the low of the day which unfortunately didn’t leave much room for taking profits from today’s example trade.
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