Starting the Week --> Monday, January 24, 2022

 VOLATILITY IS HERE! 


Man, what a crazy trading day! 

Huge gap down day to start, VIX exploding +30% higher, and then comes the massive dead cat bounce rally. 

$MNQ/$NQ rallies over 715 points from the lows and all the indexes reverse to close positive. 

Dow rallies, S&P rallies and $IWM rallies to close +2.3%!

Very interesting day that had plenty of opportunities on both sides of the market.

Let's recap last week before I talk more about today and what potentially I see happening in the short term~

  • $MES/$ES rejected off recent All time highs and rejected lower to form a new lower high ~ $4650s
  • $MES/$ES broke below $4572, was tested and failed to move lower
  • $MES/$ES broke and failed to hold the $4550-$4500 range, setting us up for a test lower into a weekly swing area from October 2021. 

Fast forward to today- huge gap down on both a daily and weekly chart. We gapped down into the recent October 2021 swing low. 

We opened in the level, broke the lows, but could not close below the lows ~ $4260s-$4290s.

As you can see from the picture above, today's move was huge. We broke the most recent swing lows that took the market to new all time highs, and retested a previous area of a range breakout, but could not close below the lows...

What happens from here? Don't know. But, from the looks of the Globex session start $4382ish is an area to pay attention to. 

Also, pay attention to the VIX futures market. At the time of this writing its up and holding the close from today's US session. 

Big picture Daily/Weekly charts we need to pay attention for a close above/below the $4260-$4330.

 

Tomorrow should be interesting. Let's see what happens for the rest of the week.

If we can hold these levels, look for a move higher back to ~$4500+

See ya next time!


Don't forget to join us in our Discord server! ---> https://discord.gg/PXQBNZvHYN

 

Jeff


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