Mostly Sluggish, Mechanical Trading After Yet Another New S&P All Time High

A new all time high, 2213.75, in the S&P 500 emini futures was made in the pre-market ahead of the open of the US pit session on Wednesday. Opening a point and a half above the prior day’s range, the pit session high could only reach 2213.00, two ticks shy of the new record high, before selling off back into the prior day’s trading range.

With apparently no interest in trading at the new record highs, mechanical selling off the open in B period sold to one tick above the previous close before balancing through I period, setting the technical tone for the day as traders await Friday’s Employment Report.

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After forming a mechanical selling ledge in E,H and I periods, a late break in J period traded through Tuesday’s pullback low at 2201.25 and weak C period low from Tuesday, before short covering back to within a tick or two of the session’s half back level and prominent developing point of control at 2205.75. Selling resumed in M period, with price trading lower exactly to the early high volume level from Tuesday’s rally starting point at 2197.50.

To date, new all time highs in the S&P that were created in the overnight sessions – while they can hold for some time – have never lasted and have always been traded through during a US pit session.

Below the market still remains plenty of poor structure to be repaired, including a poor/near matching low from November 22nd at 2191.75, and a poor low from November 18th at 2177.50.

Recent unrepaired prominent points of control also remain below at 2180.50, 2172.50 and 2167.50.

An immediate market profile trading reference for Thursday, depending on where the market opens, could be Wednesday’s point of control/rally high at 2205.75. Acceptance above that level should see price test the selling ledge at 2208.00.

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Wednesday’s D period high – just two ticks above Tuesday’s high, and B period high – just one tick from the open print, are very mechanical trading references and could have good odds of being tested.

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ES reenters prior two day balance

es-reenters-two-day-balance

The ES reentered the two day prior balance area, from November 22nd and 23rd, below 2203.00. Often the short term destination trade, when price reenters a prior balance, is the opposite end of the balance. The profiles at the low of the balance also left an unrepaired poor low at 2191.75. Failure of price to find acceptance above 2203 and back into Monday’s value area could see price test 2191.75.

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