After a lot of chop and indecision before and after the release of the Fed minutes Wednesday the ES staged a late rally in the final three 30 minute periods, auctioning to within two ticks of the 2158 September 9th selloff high.
The single print at 2147.50 in L period could be an important trading reference on Thursday. The ES closed at 2156.25, near the top of the late spike and September 9th high. If the market opens above the spike it could suggest higher prices from Wednesday’s Fed rally are accepted, and the market could then attempt to fill the gap from September 8th at 2169.50. There is also an unrepaired very prominent point of control from that day at 2173.25.
Opening within an upward spike ordinarily suggests that price is being accepted, at least initially, and keeps the rally in tact while allowing two-sided trade to take place. Wednesday’s late rally left two anomalies in the spike. Aomalies are often a sign of emotional trading and usually have good odds of being repaired.
Opening below the base of the spike could be considered negative as price would be trading back into the September 19th and 20th two day balance. When a market reenters a previous balance the potential target is the opposite end of balance, in this case Wednesday’s low at 2131.50 (which was just two ticks above the previous day’s close).
Although the market has been one timeframing higher for the past 5 days, the past three session lows are tightly bunched together within two points of each other. If price breaches 2131.50 it could potentially set off a “firecracker effect”, hitting stops below those lows, and accelerate lower. The poor low at 2123.00 from September 16th remains unrepaired, along with the poor/weak low at 2112.00 from September 14th.
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