Monday’s ES pit session gapped open two ticks above the prior day’s high. After trading back into the prior range by only one tick, price traded higher in the opening period to one tick below the April 12th daily high at 2349.50. Wednesday’s pit session high can be considered a weak high because it was almost exactly at such an exact reference used by short term traders.
By the gap higher opening, price did not first trade back to the prominent back to back points of control and previous pit session close at 2337.75, probably lowering the odds for continuation of the attempted breakout of the balance.
After the low confidence opening and attempted breakout higher stalled (NYSE first half hour volume very light at only 266k) sellers appeared at the opening of F period after a tight D/E bar balance that traded in and out of the prior range (E looked above the inside bar of D, failed, and traded through its low). The market one timeframed lower back through the prior day’s range to within one point of the previous low.
The developing point of control, which began to widen to 5 TPO’s at 2346.00, lowered to 2344.25 in F period and had a chance of lowering again late in the day but ran out of time. Were traders getting short in the hole late? Wednesday’s profile left many anomalies, which always have good odds of being at least partially repaired in the next session or one soon after. Carry that information forward, along with the weak high at the 2349.25/.50 level.
Value, which was higher for a good part of the session, finished the day as overlapping to higher.
Depending on where price is at Thursday’s open, the focus could be on the now three close together daily lows at 2331 25, 2330.25 and 2328.75, potentially setting up another “firecracker effect”, where hitting one set of stops below one level will trigger more stops from nearby price levels. Acceleration below those lows should easily see price test the prior weekly low at 2324.00, and potentially targeting the March monthly low at 2318.00, followed the by the psychological 2300 level. There also remains an unfilled gap from February 10th at 2312.75.
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