Note how the ES futures (above) have been trading overnight after yesterday's late afternoon selloff. We have traded in a relatively narrow range, attempted to break below yesterday's low (failed) and then attempted to break to overnight highs before the 7:30 AM CT numbers (and failed). As a result, we are trading solidly in the overnight range, with the overnight highs and lows defining important near-term levels. The longer we spend in this range, the more business we transact at the lower end of yesterday's range, and the lower we accept value. For the day session, I would expect a nice bounce higher if we can hold above yesterday's lows on early selling. Inability to take out the overnight highs in early buying would target those recent lows.
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