Going into 8:30 the S&P futures were above recent swing highs. We set a Globex high at 1434.25 and we are pricing an open right near yesterday’s close. I noted early yesterday that a Santa rally may be short lived and I wanted early involvement. Yesterday was the spark that lit a massive pile of paper aflame, whether we get the soaked logs ignited is another story.
I expect to see some early back-and-fill action. Key price areas include last Wednesday’s Fed reaction around 1430 then possible support at yesterday’s high/close which coincides with last Wednesday’s value area high at 1428. The next level of key support is yesterday’s value area high at 1422. Should we sustain trade below that level I would expect a quick trade down to the value area low of yesterday down to 1416:
My plan is to cut any early weakness out of my portfolio if necessary, to make room for better charts. Stocks of interest going into today are CERN, HEK, FTK, REGN, SHLD, and SKS.
For the sake of redundancy of an important concept, should we sustain trade below 1422, we could get a quick flush. I may cut some longs and see how things pan out.
Update: S&P making a new overnight low into the open. Looks like participants want to re-auction the thin rip from yesterday’s close to ensure buyers are still present from 1422-1425. Not quite rip mode!
Update II: We are in fact IN RIP MODE!
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