TRADING S&P 07/13/2017 Daily insight, S&P futures, ES

This is my daily preparation for S&P futures (ES) trading and it is for your educational purpose only and definitely cannot be considered as financial advice. There is a substantial risk in derivative trading and it might not be suitable for you. Don't rely on past performance as it is not indicative of future results.

Despite significant move up during yesterday's European session market remained within June's balance range. It seems that this move up, was driven largely by technical factors, as there were no any major news before the US session and Yellen testimony. First of all, on Tuesday afternoon market was able to buy everything it lost during the first half of the day and close at the opening prices. This provided enough confidence for traders to enter long during Asian session. Then technical traders joined the market, as trend lines across 1h, 4h, and even daily charts were broken, this easily pushed market through major volume range that was built during June (2429-2436). US session started at the high of this range, which caused further liquidation during opening hour. However, at the high of June's value range, sellers actively joined the market around 2438.75 price, which did not allow the market to accomplish its target of 2447.5 and market stopped at daily high of 2443.75.

Today during European session, market broke yesterday's high and achieved 2446.5, but we lacked buyers to accomplish the target of 2447.5 again. This shows that there are enough sellers at the tops of June's value area. Based on this my first, scenario is that , market will make another attempt to reach 2447.5 during US opening hour. However, after the fail to approach or break this level, the retracement back towards bottom of yesterday's range is expected. If more sellers will join around 2435-2436, market will attempt to close a gap between Tuesday and Wednesday US trading sessions.

The second scenario is less expected by me, but still have a good chance for a development, as we broke significant levels and are in a strong uptrend on daily chart. This would be an attempt to reach 2447.5 and following attempt to establish a new all time high by bigger buyers. This scenario I won't be trading, but it might be good for those who will be willing to buy pullbacks.

Chart of Tuesday and Wednesday US trading sessions with volume profile:

4h chart with volume profile