The overnight session was quiet, and the first thing to catch my eye is the way price kept bouncing off yesterday’s low at 1688. There were four instances overnight where we saw buyers reject attempts to break this level.
As a result of all that time being spent near the lows, we have formed a very lopsided market profile overnight. This gives us some interesting context clues as we trade today.
Many other markets are quiet too. Take for instance, the Euro currency future via the /6e. There has been strength but not enough to break yesterday’s highs. Instead the Euro marking time with a gentle sine wave. If however the Euro cannot strengthen this week, it could still be stuck in a bracketed range dating back to the beginning of 2013.
Returning to the /ESZ3 or $SPX December future, our key upside level of resistance is close at 1693.50. When we broke down yesterday to commence gap fading we left a sharp low volume node at this price. It can’t be seen as clearly on the below market profile charts as it is on a pure volume profile, but you will notice a split in the profile at this point and a value area low. I’ve highlighted this level, other key areas of opportunity, and a few scenarios for today on the following market profile charts:
