ES Futures Daily Insights - Fri 4 Nov 2022
ES is most likely back in bearish mode - here's why
GDR Model Insights for the Week
GDR Model Performance (2022): +26.80%
Market Tone: Bearish
Positioning: -50.00% Short (previous day: -50.00% Short)
Commentary: GDR Model remains solidly bearish.
ES Market Structure Insights for Tomorrow
Both today’s high and low don’t have a lot of excess, which means they are vulnerable to being taken out sooner rather than later. Tomorrow’s employment report is likely to bring more volatility.
On balance, I believe today’s low is far more likely to be taken out than today’s high and thus the ES is more likely to sell off further. Here are the reasons:
The ES opened on a gap down that was not filled before the end of the day
Today’s low, made in the morning, is very close to an exacting level (3700), which suggests weak-hands buying
Today’s profile is a P shape, typically the sign of short-covering with no follow-through buying
Today’s settle was bearish, i.e. below value. It was also within the 18-Day Balance Zone from September
Unless the ES rallies meaningfully (very possible given that employment data comes out at 8:30am), it will open below the T+2 Settlement Low, which can precipitate further liquidation
There is some market-generated information that supports a bullish idea, but it’s far overwhelmed by the bearish markers highlighted above. For a bullish idea to take hold tomorrow, the first hurdle is to find acceptance above the T+2 Low around 3770.
Potential Market-Moving Events Tomorrow
08:30am - Nonfarm Payrolls
10:00am - FOMC Member Rosengren Speaks