ESM22 Daily Debrief 03/21/2022
Market Overview
All major indices were down today. Certain sectors did better than others (Energy).
Note: The difference between the 2 and 10-year yields is only 15 basis points.
Futures
ESM22: 4452.25 (-0.03%)
NQM22: 14370.50 (-0.30%)
YMM22: 34436 (-0.57%)
RTYM22: 2062.8 (-0.84%)
Stocks (Top 5)
$AAPL: 165.38 (+0.85%)
$MSFT: 299.16 (-0.42%)
$GOOGL: 2722.03 (-0.02%)
$AMZN: 3229.83 (+0.15%)
$TSLA: 921.16 (+1.74%)
Top-Down Analysis
Monthly Time Frame: On a monthly time frame, March is still positive. ES could not take out the February low. Has the bottom been hit for 2022?
Weekly Time Frame: The weekly time frame is indicating that ES is hitting resistance in the 4473-4485 area. It retested that area today for the first time in a month and it was able to hold up.
Daily Time Frame: As mentioned in the weekly analysis, ES is encountering supply / resistance at 4473, shown on the daily time frame also. That area was tested for the first time in about a month and failed to look above it.
Performance & Technicals
ES performance over the last 5 days:
Today’s Value Area:
VAH: 4460.75
POC: 4442.75
VAL: 4435.25
Today’s session filled in the LVN from the prior day that was right below the POC.
Session Recap
Electronic Trading Hours (ETH)
Overnight Session:
At the prior day’s close, the market makers had taken the auction long to the highest prices traded all week. The ON session opened within the prior day’s total trading range and was also just inside the value area. Overnight inventory was balanced. It was short to begin the Asian open as market makers seemed to have been taking profit overnight. This pushed ES down below VWAP. After London opened, shorts covered and moved the auction higher and above VWAP. The LVN between 4430 and the prior day’s POC was filled in the overnight.
ONO: 4460
ONH: 4463.25
ONL: 4430.75
ONRange: 32.5
Regular Trading Hours (RTH)
Initial Balance (IB) Session / US Open:
The US opened within the prior day’s price range and value area, several handles below the POC. Shorts covered and the market moved up at the open to take out the ONHigh and PDHigh. The market internals and breadth were not very strong though. At 4473, the buying ended once short stopped covering their positions and supply was met. The auction moved back down into the prior day’s value area leaving behind excess as longs were stopped out on the way down. The auction continued to move lower, but was unable to retest the ONLow before supply shut off. There wasn’t much movement for several moments as inventory was being cleaned up. The IB period closed several handles above the period low.
IBO: 4451.5
IBH: 4473
IBL: 4435.50
IBRange: 37.5
Remaining Session:
After the US open, shorts that covered and longs were able to take advantage of supply being off and retested the area above the prior day’s value area. It balanced and distributed in this area for several hours. Between 12:30-1pm, coinciding with Jerome Powell’s inflation comments, demand dried up and shorts drove the auction down 50 points in less than an hour. There was some buying at the ONLow, but this area collapsed as well. The drop continued until supply was shut off at 4415 and we saw responsive buying again. Today’s trading range was about 1/2 of the moving average and ES closed 5 ticks from the prior day’s close.