Yesterday’s action in the S&P was successful in closing last week’s gap lower, but we’re still trading lower then where we came into the market at the beginning of last week. As a result we’re coming into some overhead resistance on the profiles where I expect to see active sellers (overhead supply).
Keep in mind however, if we’re seeing buy flow continue to drive the market, expectations may change.
The overnight session shows a near-perfect balance which leaves little in the way of clues to potential scenarios today. We did take out the RTH high from yesterday overnight, but the action was met with selling. Mostly the overnight session reflects a healthy overnight digestion of the move higher.
It’s going to be interesting to see if the buyers can hold these levels, particularly 1650, the swing low once the market finally rotated lower late yesterday afternoon. I’ve highlighted some levels I’ll be monitoring for trades on the following market profile charts:
