Emini S&P 500 a market profile summary

Liquidation break yesterday triggered by news that the Biden administration is likely to implement the highest capital gains taxes on high-income earners to fund various agenda items like the infrastructure bill. Knowing that the market maker has always been one of those “high-income earners”, prices in the Emini S&P reacted accordingly offering up almost 57-odd points on a break lower intraday and eventually and almost in a sympathy move settling up at 4127.75 about 12.5 from those lows. The point of control in this break lower which had migrated higher during the intraday yesterday to 4162 will more than likely evolve into forming somewhere around 4135.50 where the premarket participation has been healthy. Do we hold that 4129 area to move things higher today into the core of FAANGMN+T earnings, only time will tell. Note that we halted our fall at yesterday’s “value area low” range between 4110~4117 so in the early price action today, we need to watch that zone again to see if we hold support and if “buy the dip” participants emerge from the woodwork. Today there is support at 4113.50 and if that does not hold, expect 4098 and 4072 to follow in short order for more than likely, a bottoming pattern to close out the week of trading for the Emini S&P.

Scenarios

The scenarios I put out every day on here aren’t based of price which, although important, is merely a marketing tool for instruments. I am converting conversations on value and equating them to price-levels so as to make them actionable for short-term participants in the futures markets.

• If 4113.50 holds in the initial drop, try long trades into the 4145 area. If 4113.50 fails to hold, target 4098.00 and try not to jump in long or short in the premarket.

• Also look at the 4120.75 area which should give you some clues on if a move lower is more likely than a move up higher from support. Inability to hold that price zone makes it difficult for long traders today and it would be wise to make your early trade of short duration and pointing directionally short.

• There is a chance of some announcement from the Whitehouse that the proposal for higher Capital Gains taxes is still being debated internally before being placed on the Presidents’ agenda. If this were to evolve [and it is pure speculation] we could squeeze higher into the 4180 area again today.

Key levels

Profile chart