ESM22 Daily Debrief 03/18/2022
Market Overview
Amid quadruple witching, rate hikes and a war, stocks ripped for the first positive week in March while erasing all losses for the month. Below are the closing prices for some symbols I follow throughout the day.
Futures
ESM22: 4453.50 (+1.17%)
NQM22: 14413.50 (+2.17%)
YMM22: 34633 (+0.79%)
RTYM22: 2080.2 (+0.97%)
Stocks (Top 5)
$AAPL: 163.98 (+2.09%)
$MSFT: 300.43 (+1.76%)
$GOOGL: 2722.51 (+1.71%)
$AMZN: 3225.01 (+2.55%)
$TSLA: 905.39 (3.88%)
Top-Down Analysis
Monthly Time Frame: This week’s rally has put the February open of 4493.25 squarely in ES’s sights. I’m interested to see if there’s any supply at that level. Or does this rally have enough juice to challenge the 4586 Feb high?
Weekly Time Frame: This was clearly a very strong week for ES being able to take out the highs from the past three weeks. Next up is 4485 from the week of 2/14.
Daily Time Frame: The 4418 area was a swing high that ES was able to take out today. 4475-4485 (seen on the weekly time frame) is the next level that ES could challenge before supply is met.
Performance & Technicals
ES performance over the last 5 days:
ES Volume Profile for today and from the past week:
Three high volume nodes were formed inside today’s value area. It will be interesting to see if the market comes back down to retest today’s value area and fill in any of the low volume structures. Here’s a 30 minute chart from the past five days with volume profile.
Session Breakdown
Electronic Trading Hours (ETH)
Overnight Session:
At yesterday’s close, the market makers were long after having pushed the market up to the highest levels traded all week. At the ON open, ES opened inside of yesterday’s total price range and slightly above the value area by a few ticks. Inventory in the overnight was relatively balanced. The market makers were either distributing and taking profits or accumulating for another leg to the upside (zig-zagging through VWAP). The auction has come down to the upper levels of yesterday’s value area and has found acceptance. Supply was never able to push the price down to yesterday’s POC. The range of the overnight session was smaller than it’s been all week and was trading in about a 30 point range. POC for the overnight was formed around 4374.
ONH: 4394.25
ONL: 4364.50
ONRange: 29.75
Regular Trading Hours (RTH)
Initial Balance (IB) Session / US Open:
Leading up into the US open, the market started rising and began trading above yesterday’s value area. Upon opening at 4387.75, the market makers pushed the price down as it ran some stops. Shorts started to cover and the market moved back to the upside, gaining +40 points to trade up into 4400. There was supply met once the market moved toward yesterday’s HOD. Several minutes were spent in this area where bids and asks were being filled and the market provided no clear direction. Once all the selling was absorbed, longs were able to take out yesterday’s HOD and push price up to 4416. Once here, the inventory began to correct again. The IB session was able to close above 4400, ending the period at 4405.50.
IBH: 4416
IBL: 4379
IBRange: 37
Remaining Session:
After the US open, the market corrected to the downside. There was not enough supply to get down into today’s VWAP. Short covering came in to push the price back above 4400 to find some acceptance here. Once there, it barely looked back as it kept walking the upper Bollinger Band higher into the 4400’s. Longs were able to push price to levels not touched since 02/17/22.