Liquidation break in the ES Tuesday coming off the U.S. Columbus Day Holiday. High confidence, directional selling from the opening bell was not accompanied with heavy NYSE volume.
The first 30 minute (A) period left a lot of excess single prints on somewhat light NYSE volume, and the B period bounce high was sold exactly from the previous day’s close, indications of short term liquidation and probably not early signs of a more significant selling rally getting underway.
But the selling continued from the previous close, with price one timeframing lower through D period as day and short term momentum traders piled on, trading through the prior pit session low and the poor low from October 4th.
After balancing for a few periods, the attempted rally in G period failed exactly at the B period single print, and price sold off again resuming the one timeframing lower through J period where the market repaired the succession of weak September lows (as noted in some of our previous posts), and eventually repairing the poor low from September 16th at 2123.00.
Total NYSE volume for the session was very low, at just 3.37 billion, in comparison to the large point move in the ES.
The selloff left multiple anomalies in Tuesdays’s profile. Some or all anomalies left from emotionally driven, stretched out market profiles are often at least partially repaired in either the next trading session or one soon after.
An important combined trading reference for Wednesday could be Tuesday’s late rally high/point of control at 2135.00, which was just two ticks above the close. Acceptance above 2135.00 could target Tuesday’s G period rally high, followed by the 2143.25 single print, and possibly some of the excess single prints from Tuesday’s A period excess.
Failing to find acceptance above 2135.00 could potentially see a retest of Tuesday’s low. Acceptance below 2121.75 could bring into play the back to back similar daily lows at 2112.00/2111.75 from September 13/14.
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