ESM22 Daily Debrief 05/18/2022
Market Overview
Today was a bloody day for pretty much everything. Stocks drowned after the big retailers provided weak guidance numbers, stating that supply chain and inflation had started to impact their bottom lines faster than they anticipated. Costco fell 12% and Target plunged 25%. The Dow suffered its worst day since 2020.
Here are some of today’s closing prices.
Top-Down Analysis
Monthly Change: -4.96%
Thus far, the lows from the past three months were all erased and May has established new 2022 lows. MoM, ES is OTFD unless the auction can recapture 4588.75 at some point this month.
Weekly Change: -2.41%
Last week, ES extended its weekly losing streak to six. ES is OTFD the past four weeks. 4099 will need to be eclipsed to the upside this week to end OTFD.
Daily Change: -3.97%
ES’ drop took out the lows from the last three trading days, ending OTFU at four days.
Unbroken Levels (M, W, D)
Highs: 4631, 4588.75, 4519.75, 4509, 4393.25, 4303.5, 4099
Lows:
4000.5,3979.5,3915.5, 3855, 3843.25, 3826.25, 3796.25, 3728.5, 3720.5
Performance & Technicals
5-Day Performance
Technicals
ES Composite Volume Profile (5 days)
ETH VAH: 4089
ETH VPOC: 4015
ETH VAL: 3934
ES RTH Volume Profile (today)
RTH VAH: 3980
RTH VPOC: 3920
RTH VAL: 3905.50
Prior Day RTH High and Low
T+2 High (for next RTH session): 4091.5
T+2 Low (for next RTH session): 4029.75
Here is a chart of the past five sessions with a composite ETH Volume Profile:
Here is a chart of the past five sessions with a daily ETH/RTH Volume Profile:
Here’s a TPO chart of today’s session with ETH/RTH Market Profile:
Today’s TPOC was 3970.25. There were two large sets of single prints. One set was from 3985.5 to 4002.25 and another above 4024.25.
Session Recap
Electronic Trading Hours (ETH)
Overnight Session:
At yesterday’s close, wholesale’s position was long. The ONO was just inside yesterday’s price range but above the value area. Inventory in Globex was short underneath yesterday’s RTH close and VWAP for most of the session. The auction sank and went through yesterday’s value area from top to bottom. Heading into RTH, ES started to sell of sharply with heavy inventory.
ONO: 4091.25
ONH: 4095
ONL: 4035
ONRange: 60
Regular Trading Hours (RTH)
Initial Balance (IB) Session / US Open:
The RTH open was inside of yesterday’s price range but below the value area. In addition, ES opened underneath the T+2 high. There was plenty of supply at the open as the early bid was absorbed and ES slowly fell lower throughout the opening hour. After the initial 15 minutes following the opening bell, the auction traded sideways. All attempts by responsive longs were absorbed by sellers and thus ES kept going lower and took out yesterday’s RTH low. However, shorts were unable to drop ES all the way down to the Globex/LOD. The opening hour wasn’t as violent as the past several weeks as the IB period selloff was gradual and less volatile.
IBO: 4038.25
IBH: 4041.5
IBL: 4007.5
IBRange: 34
Remaining Session:
After the IB period, the heavy selling persisted. Efforts made by long traders to buy responsively were weak and consumed by shorts. ES sank below the 5-day VPOC, as well as the lows from the past three trading days, a sign that outside sellers were in the market. Lower lows were put in the whole RTH session. ES bottomed and balanced for the final hour of RTH several ticks above the RTH 5pm candle close from 5/12/22 @ 3905.