Heading into the long weekend, we are anticipating Options Expiration (OPEX) on Friday as it could likely add to the selling pressure (or continue the chop fest).
We could see selling ahead as the holiday weekend makes the market even more vulnerable and headline-driven.
For the rest of the week let’s see if the S&P 500 (ES) will continue to sell off or bounce back to its middle range due to OPEX.
There is a big liquidity range sitting above the ES with point of control (POC) at $4,505. This further proves our thesis on liquidity that price will bounce toward POC and if it doesn’t break through liquidity levels, the stock will fail and retreat.
Pay attention to lows this week. If the ES breaks the range near $4,354, we could see uglier price action selling off toward $4,328.50 to $4,300.
If the ES holds this range, it could revert to $4,420 and chop, as we’ve seen for most of the week. Note that seeing this choppy action can be a common occurrence during OPEX.
SHOP is a name we’re most excited about as it dropped hard, filled the gap, and is starting to free fall again. If the selloff scenario plays out into Friday, SHOP could hit $630 and continue lower to $600.
Be aware of news updates, watch key ranges, and enjoy the long holiday weekend.
Stay Focused!