The overnight fun continues. Asian markets started the week lower on fears of global economic slowdown and debt concerns in the US and Europe. I recognize that the failure of the US debt supercommittee in reaching an agreement over the weekend is a problem (I am not surprised though), however any slowdown in China will dwarf that by a good order of magnitude. It’s not all that bad actually. Even homes sales went up this morning. Cheer up!
Technically speaking the 1190 level on the ES is an important one to watch (bear in mind the ES already broke the psychological 1200 level). This level has more balanced areas than any other. It found strong balance on Aug 29, Sep 8, 19, 21, Oct 11, and 13. Today’s market profile is developing a “b” patter which means longs are liquidating but no new shorts are taking place. As my previous post explained I am not seeing large institutions participating in neither buying or selling activities. This could be a problem. Either they are waiting for price to retrace lower to enter long or for bearish confirmation to enter short. As before, bearish confirmation could come of the form of bad news, as opposed to economic data. Please note we may close below the 20 EMA on a monthly chart today which is technically bearish. Second, VIX continues to find support at the 30-40 range.
Starting at 1190, here are the next target levels on ES:
- 1214.25 (VPOC Nov 18)
- 1250.00 (VPOC Nov 16)
- 1278.00 (VPOV Oct 29)
- 1182.25 (VPOC Oct 10)
- 1155.00 (VPOC Oct 7)
- 1127.25 (VPOC Oct 5)