Outlook 07/19

Context: Despite some of the slowest trading sessions of the year, U.S. indexes continue to notch record highs, with the summer sun heating up markets. Futures now look poised to continue their bullish run amid a quiet day of economic releases, while investors turn their attention to another slew of corporate earnings. Banking heavyweight Morgan Stanley is among the companies slated to post results before the open.

Today's Economic Calendar

8:30 Housing Starts
10:30 EIA Petroleum Inventories

/ZB Plan: Yesterday 30y Bond moved around upper edge 154'00 and found acceptance. Now /ZB shows in balance so we've 2 options: A) If market test yesterday's VAL 153'15-153'10 and holds, I become a buyer towards 154'00. B) If market fails at yesterday's high 153'31, try to sell towards yesterday's VAL 153'15-153'10. More selling helps /ES on the way for a new all time high.

/ZB Value: VAH 153'29 POC 153'22 VAL 153'10

/ES Plan: New CHVN around 2456 drawing current auction range CLVN 2461-2452. Yesterday's auction finally closed balanced filling daily gap. We are moving above yesterday's value and Globex is balanced, so first idea is wait and see reaction at the extreme of this balanced range.

/ES Value: VAH 2457.25 POC 2454.25 VAL 2451.75

A) If market fails at VAH 2457, I expect more selling pressure leaning on that level towards POC-CLVN 2452. If edge 2452 fails, 'Back to Value' game starts leaning on that edge, towards CVAH 2447.

B) If market push above ONH 2461 drawing a new peak of volume above (HVN), we could see new highs towards Monday-Friday targets 2468-71.

/ES Update: New ATH 2466 drawing a bimodal 'B' shape within current auction range CLVN 2466-2461, so first idea is wait and see reaction at cluster zone MID-VWAP-VAH 2462-2461.

A) If market holds 2462-61, try to buy towards balance target 2470.

B) If it fails at 2462-61, I expect more selling pressure towards VAH 2457. If YVAH 2457 fails expect more selling towards CLVN-YVAL 2452.

Tips: When the direction of the market isn’t clear, one trick you could use is to see what the longer term structure reveals (Globex, 2-3 days, Weekly). Is it a “P”, “b” or “D”. The longer term bias generally wins.

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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