02/07/2023 Synopsis
It was a turbulent afternoon in the stock market following Fed Chair Powell's interview in DC. All indexes closed in positive territory.
Market Overview
The equity markets were a roller coaster following Fed Chair Powell’s interview with David Rubenstein at the Economic Club of Washington DC. Every index finished up led by the Nasdaq. Eight S&P 500 sectors were positive. Technology led while consumer staples lagged.
US Treasury yields were mixed along the curve. The rate on the 2-year note fell 0.8 bps to 4.47%. The 10-year yield climbed 3.3 bps to 3.67%. Below is a chart with a comparison of the yield on several Treasuries of varying duration.
The US Dollar index $DXY lost 0.28% to fall to 103.33.
Crude oil futures jumped 4.09% to 77.14.
Here are some of today’s closing prices.
E-mini S&P 500 Top-Down Analysis
📈 Below are the monthly, weekly, daily and 4-hour charts for $ES_F.
M/M: January was an inside month as all price action was contained inside December’s high and low. The past 3-months have been in balance.
W/W: For the sixth straight week, $ES_F traded above the prior week’s low and is OTFU. $ES_F momentarily rose above the 23.6% Fib level but could not close above it.
D/D: Today was an outside up day where the range of trading exceeded the prior day’s range and closed above the prior day’s high.
E-mini S&P 500 Metrics
Recent Performance & Technicals
E-mini S&P 500 Volume/Market Profile
ES Composite Volume Profile (5 days)
📈 Here is a chart of the past five sessions with a composite ETH Volume Profile:
ES ETH/RTH Split Volume Profile (5 days)
📈 Here is a chart of the past five sessions with a daily ETH/RTH split Volume Profile:
ES ETH/RTH Split Market/Volume Profile (today)
📈 Here’s a TPO chart of today’s session with ETH/RTH split Market/Volume Profile:
ES Market/Volume Profile Levels
RTH Weak High/Low: n/a
RTH Single Prints: n/a
RTH Excess: 4098.25 to 4106; 4175 to 4188.25
RTH Gap: n/a
Session Recap
Electronic Trading Hours (ETH)
Overnight Session:
Wholesale was short at the prior day’s close. The overnight open was inside of the prior day’s value area. The overnight session spent the most time above the previous day’s close. Buyers hit trapped long supply one tick shy of the previous day’s high. There were corrections to inventory during the London open and in the hours leading into RTH where inventory got short. As the overnight session was coming to an end, sellers were pushing the auction lower to new session lows at 4110. VPOC in the overnight session was 4127.
Regular Trading Hours (RTH) Session:
RTH opened below the prior day’s value area but inside its LOD. It was also under the T+2 low. The initial balance period, IB, had uncertainty amongst traders. Price action jumped around a tight 12-point window and dipped beneath the overnight range. Sellers threatened to take out the previous day’s low but fell short. Price stabilized at 4106 and $ES_F rotated up 20+ points with responsive buying to get back into the overnight range and prior day’s value area. As Fed Chair Powell spoke with David Rubenstein at the Economic Club in DC, volatility picked up. First $ES_F ripped 55-handles to the upside, above the prior day’s high before pausing at 4175, 2-ticks shy of Friday’s VAL. The auction then dropped 75-points and took out the IB low and prior day’s low. At 4098.25, supply dried up and short covering sparked another 90-handle climb. $ES_F ran into trapped long supply at 4188.25. The auction backfilled down 20 to 25-points going into the close.