The Precise Take – ES continues to accept value near highs

Treasury & Overall Analysis:  Yesterday’s 3 Year auction went well, with markets relatively unimpressed, either looking ahead to the 10 Year today and 30 Year tomorrow, or already pricing in strong demand.  A poor auction today (1:00 pm) could boost equities; however a good to great auction will likely not be a market mover again.  30 Year T-Bond futures hit the 50% retracement from August lows overnight and, therefore, have entered the zone in which we would expect to see a potential reversal in both equities and Treasuries, should one occur.  This zone extends from 118 6/32 to 117 4/32.  After watching yesterday’s price action and taking into consideration tomorrow’s heavy economic calendar, the time horizon for a potential reversal is extended to tomorrow.  Should it not come, we would expect to see a test of the next upside price target in the ES of 1053.50 into next week, where there is a much greater chance of reversal after having squeezed out the new shorts.  This target could also possibly be reached today or tomorrow, but that is unlikely.

Gold:  Gold has not yet confirmed the breakout when priced in other currencies, with yesterday being a down day in all but gold in the USD.

Trading Today:  As we write, the ES has broken yesterday’s combined session range to the upside, as well as day-session-only R1.  Key in early trading after the open will be to watch yesterday’s market profile point of control in confluence with long term point of control at 1024.50 to 1024.75.  The ES has committed to building strength at higher value levels, and a failure to make new highs and drop below 1024.50 is…

Continue reading here.