Ahead of the holiday- SPX preview

As we close out today's session and get set for the expiry move on Thursday there is a holiday in between when global markets would be running and important events scheduled in Europe especially Germany.

 

As a rule the option dominated markets in India do not react to overseas news in expiry week especially expiry day.

 

But it helps to have an understanding of where the US markets would be as they complete 2 sessions ahead of our open on Thursday.

 

Mp Spx Ahead Of The Holiday- Spx Preview

 

The chart above is a composite SPX chart showing two auctions on the left and two auctions on the right and the sideways consolidation in between these 2 .

 

6th Sept was the day when Draghi announced his plans for Europe sending the equity , currency and commodity markets into stratosphere.

 

That reaction on the spx was seen in a wave of single prints which were new buyers coming into the market.

 

The two high volume points were 1430 and 1433 on the 6th and the 7th of September when that buying happened.

 

The big reversal on Friday (trend day) and the sideways auction of Monday on the spx had the same two high volume points.

 

The point is that the markets are poised to do a 30 point  move in the next two days targeting 1463 or 1403. At the moment the seller is strong in the latest auction on Friday which was an open drive down.

 

It's an excellent trade setup as the seller from Friday meets the old buyers from the 6th.

 

Let's see how it shows up on Thursday morning.