There is no major misbehaving planned, @golden6. Just keep your eye on the NDX (Nasdaq 100) for clues.
ES futures have traded down from Friday's settlement of 4175.50 to around 4150 since Sunday night's open and, as you know, that latter level was a bit of a buffer for what is again major weekly support at 4100. Last weekend, we were thinking about that bracket between 4100 and 4250. I said it was kind of big because I figured you'd see that range and be thinking so what, Dan? I did not know we'd test the lower edge only a few days later, but did figure that if we did, 4000 would be in play. We did not go near 4000 in the cash market but we certainly did in the overnight ES futures.
ES value from Friday is 41.51.75 to 4177.75 and the volume poc is 4173 and not very prominent. The structure from Friday is weak and needs repair so I assume if we can stay over Friday's low we will attempt balance today. If we see weakness, look to the gap we left from last Thursday's overnight run. It would be filled at 4126.77. Below that, we have a naked volume poc at 4110. I won't go into upside potentials unless the bulls show up and because this Friday run looks like short covering to me. Upside would be a bonus here but who knows what these crazies will do.
A slow upward climb was dependent on 4150 last week and we are now over that area again, but weekly resistance has now moved lower to 4200. We can maintain implied volatility levels around where they are or lower if we stay above that 4150 level and that lessens our overall room for actual or realized volatility (big up and down swings). But you don't need hedging data to see that SPX 4200/4210 is now going to be resistance or that 4150 is primary support, because you tell that from basic TA. 4150 is the 50% retrace of the run from all-time highs to last week's lows (7 to 12 May) and the next support of 4050 is near the 50-day average that we never quite touched. So, derivatives structure as I see it lines up well with levels that anyone can see on the charts. And if there is misbehavior this week, at least we have a rough idea where to expect bulls and bears to fight. Same as last week, watch the NDX, VIX and Treasury yields along with our big bracket as we go into Friday's expiration. I assume a change in tone below 4100 and would update if we violated that on a closing basis, but I have warned everyone of Golden's warnings, so hope is alive. No pressure.
