German Election

Markets are showing signs of volatility after German Chancellor Angela Merkel won a fourth term, while her ruling Christian Democrat-led coalition took a hit in weekend elections. The alliance suffered its worst result since 1949, as the AfD won 13.5% of the vote and became the first far-right party to enter parliament in more than half a century. Euro fell 0.5% to $1.193, after having firmed above $1.199 last week.

/ES Value: YVAH 2498.50 YPOC 2497 YVAL 2496

Plan: On Friday /ES market has moved balanced within narrow range around 2497 between 2 ranges 2485-2497 and 2497-2507. Overnight shows bearish profile leaving excess at ONH 2504.50, moving within Friday's narrow value, so we've 3 options:

A) If the market moves above YVAH 2498.50 with cash volume rising, try to be a buyer leaning on 2498-2499 towards ONH 2504.50 and Gap 2505. Failure to take out YVAH early is signal of weakness and opens the gate for majr sell off.

B) If market moves below YVAL 2496 with cash volume falling, try to be a seller leaning on 2496-2495 towards CLVN 2489 and Edge 2485. Failure to breakdown ONL 2495 early is signal of a potential move back into previous value.

C) If market moves within YVAH-YVAL with internals neutral, you can only be responsive scalper from the edges sweeping the book to the other side of the range. Fade the extremes of a range is valid until these extremes are hit.

Tips: 'Try to be buyer/seller' means to watch order flow closely looking for waves of orders in your direction. You can follow that flow using Time and Sales (settings 10# contracts) or using SPX Cash Volume spread ($UVOLSP-$DVOLSP). You need to see reaction near 'LIS' key levels (VAH/VAL/2SD/LVN/HVN/VWAP)

Today's Economic Calendar

08:30 AM Chicago Fed National Activity Index
10:30 AM Dallas Fed Manufacturing Survey
12:40 PM Fed's Evans

Link for Updates

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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