With overnight inventory 100% short from the previous close, the ES gap opened lower on Thursday, extending the overnight selloff from Wednesday’s balance and trading through the 2111 September low.
B period put in an early intraday low of 2107.75 before the short covering began.
Although trade was directionally lower from the pit session opening bell, NYSE volume was not especially high, and the selling left a long line of single prints in the opening A period. Historically long strings of single prints are at least partially filled in before the end of the trading session in which they’re created.
Although the release of the 10:30 ET crude oil inventory report drove price down again in the eminis, the ES bounced off the September low in D period and rallied with crude as the oil futures reversed. After B period the market one timeframed higher for most of the trading session.
The short covering rally filled the gap in I period, trading through Wednesday’s low and previous close by a few ticks, but did not reach the very prominent point of control at 2134.25.
Depending on the open, an early focus for Friday could be the late pullback low at 2123.75. Acceptance above that reference could keep pressure on the shorts, if price trades above Thursday’s high at 2132.25 the daily one timeframing lower will have stopped.
But value was lower on the day and the market is one timeframing lower on the daily chart. failure to trade above Thursday’s high at 2132.25 would keep the one timeframing in tact. The market wouldn’t have to make a new low to continue one timeframing lower.
Acceptance below 2123.25 could see the market repair some of the multiple anomalies left from Thursday’s short covering rally.
The monthly chart is now one timeframing lower, and if the weekly chart closes below 2136.00 it will be an outside week, both negative. Another retest of the September low probably will not yield the same result.
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