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11/14/2019 ES Daily Recap

In the overnight we have been balancing in the upper part of yesterday's range. We had to assess the situation in real time as a lack of strength or buyer initiative can result at a failure at the highs.  For the long side we would need to see price hold above the intial support at 3084-86 and a break below can potentially result in range expansion. This area will serve as an indicator for the "bias" today. 
Going into the open, we had a push over the initial resistance but watching price action and delta there was a clear sign that buyers were getting exhausted at the highs. Watching delta as we tried to push higher and began to stall we observed a delta divergence at the highs which indicated that the longs were losing steam. We eventually see the price action catch up as delta began to sell off heavily and we see a failed breakout at the mid 3090s. 
Watching price action, we see price action flush and trap the longs at the highs. With this in mind, I look to short the 3094 level against the buyers who have not had a chance to sell when we flushed. Psychologically it makes sense because after we flushed, the longs were underwater and biting their nails and as soon as they got back to near even they sold in panic. The weakening internals and the continuing drop in delta gave me confirmation to hold my short to POC. We actually ended up flush down into initial support and tagged the Tuesday POC. Lacking any real downward momentum and panic settling, we did not expect any further downside at that point when we saw the internals recover. Towards close there was no real edge and we ended up grinding back up and balancing in the value area.

 

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