Some thoughts to start the week:
Buyers continue to hold the scenes of the NFP and CPI releases to start the year. We’re hearing traders start to give up the bearish narrative with price moving higher. However, we are seeing significant complacency coming into the VIX curve that is giving us caution. With OPEX at the end of the week, prepare for the auction to be unleased from its moorings.
Here’s what we see for equities:
- ES: In a range from 3930-4050…3900-3930 key for the auction to hold to keep moving higher toward the top of the bracket into OPEX….however, moving higher would only take the auction into extreme and bring the pain for buyers later in the week or early next week. Liquidations below 3900 take us back toward 3800.
- NQ: NQ is within range of the 2022 VPOC and a range high of 12400. So long as we remain below 11700-12400, bears can reemerge at any moment. Going higher in the week is likely to bring sellers later.
- RTY: RTY is in an extreme posture and we are looking for shorts back to 1855 and potentially lower. Buyers have achieved the top of a range and are running out of juice. Their best hope is that we balance early in the week and migrate the 5D higher, which would negate the short idea and allow RTY to break out higher still.
- CL: Crude back to the opening range of the year. So long as we maintain the 5D…looking for pushes to the 90D VPOC this week.
Key Catalysts for the coming week:
- Tues: Earnings
- Wed: EIA, Beige Book
- Thurs: Housing & Initial Jobless Claims
- Fri: OPEX
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