posted 9.22a.m. est
from pre-open comment Monday 20th April
>>The day following three consecutive days of active buyers usually sees buyers resting giving sellers the opportunity to appear (e.g. Tue0414). For Monday the bottom of 2dayVA is 853 and it is likely that buyers will be offered opportunity below that level today. Throughout this rally Buyers have been consistently buying price offered below 2dayVA and it will be interesting to see if they accept the chance to do so again. <<
Pre-open Tuesday 21st April
As anticipated, sellers were given the chance to appear on Monday. Buyers could have been expected to respond below 2dayVA (as they have been), maybe around first level support at 846 – but they did not. In the absence of responsive Buyers, Sellers were able to auction price lower to test the major poc at 830. Significant Selling (red at bottom) was marked and Monday’s Value Area was the lowest for seven days. That’s a good performance by the Sellers.
If Buyers remain in control I would expect them to respond quickly and auction price back above 830. If they fail to do so it will be a big clue that control is shifting to the Sellers – confirmed if we see effective selling below 830.
Frankly, I thought there was a strong possibility of the rally extending in time through to the next time pivot in early May. But we have seen a swift rejection from 872 which was the major poc for many months – that is often a bearish development. I will not be long if ES prints below 836.
Note: Typical bullish weekly structure is weakness at the start of the week and strength at the end of the week. A weak Monday/Tuesday is often not to be trusted and Buyers will respond mid week. Last week was a good example. Since the March low, Friday has not closed below the low of Wednesday.
