News: New home sales @10AM
Trade plan and Price action analysis: (Price action) Yesterday ES gapped lower before the open and just traded in a range placing value lower and shifting the vpoc down 17 points. We tested the cvpoc at 1311 area and bounced from there up into the 1318.00 area. Globex has traded higher throughout the night and leaving a p shape on the profile which is indicative of short covering over night. Holding above the cvpoc at 1311 is key for today's trading.
(Trade plan) We have new home sales figure out at 10 am and we could get a balanced open leading up to that release. With yesterday big gap down and then a consolidation it tells me 2 things. The bears are happy with that area for now and were not willing to push below the cvpoc level. And that bulls were not interested in running the market back up to reject that area. We built acceptance there. Now today i need to see if there is going to be any force in either direction placed on the market. And i will form my bias as i watch the day unfold. But to have a plan means to be ready for any scenario to play out so im expecting sellers to be active on any pushes up into resistance area and will be looking for selling opps there. If we take out the globex highs then a possible gap fill is likely and i will be less aggressive on shorts. In the case we start moving lower i will be a buyer at the 1310-1312 level as this area is strong support and the bulls will not want to see the market below here. Over all i will be patient and wait for the set ups to develop and will not be looking to trade if i don't see any set ups i like.
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