As of 8am, ES Futures are priced to gap above last week’s high at 1423. The question now is whether bulls will step in and make a big thrust higher, or if we’ll see another tepid afternoon of mixed trade. One item of note from the profile that I’ve continued to emphasize in this tight price range is the ability of the auction to take value higher every day since the slap the p fade that occurred on the first trading day of December.
Essentially, anyone who bought the hype going into December is now whole, and beyond that has watched value creep higher each successive day. Value looks ready to go exploring higher. There are too many buyers at these levels. At least that is my interpretation of the current value shift.
When I refer to value “shifting” I’m referring to volume at price. The price that trades at the highest volume is the most accepted price traded in any given day. The value area represents ~ 70% of the trading volume. Note its march higher:
Watch for bears to capture 1418 then yesterday’s low which closely corresponds last Friday’s volume point of control at 1414. Caution if either level is recaptured. Otherwise, blue skis for Santa’s sleigh.
Aside: I’m building my next multi-quarter thesis. I’ll give you a hint: it involves yesterday’s purchase of MLNX.
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