Overnight participation is net short again today after a push higher past the close yesterday following some earnings reports was met with selling during the Asian session and continued into the European session. Futures have fallen as much as 35 points from the settlement yesterday. Money is moving out of equities into cash in the US as investors prepare to take cover amidst growing concerns that the Fed is going to keep the aggressive pace of rate increases in order to reign-in inflation.  A rise in cash based portfolios remains indicative of caution among market participants who are questioning whether the recent rally in equities will hold and if has credibility to hold after last year’s steep selloff. While we continue with Tech earnings into tomorrow and weaker than expected numbers from Tesla will likely set the tone for the weeks that follow. We have pushed below R3 here in the overnight session, so the early trade could be the fade to the upside as markets appear to rebalance and close a potential gap down into the open. The scenario does not bode well for much of a gap fill and instead lean on a gap down and go for today. 

Trade ideas with focus on economic data for the short-term market participant. (IWM) 

• An ideal long trade originates at 3985 and aligns with the playbook setup and has a strong likelihood of finding buyers at that price point. Use a strict 5-point stop at 3980 while looking to take your trade off at S2 or 4016.50. 
• The short trade is active from the ON session and originated as a limit order of S1 at 4028.25 on the failure by futures participants to hold the push up after close. This move has a 3984.50 profit target which could deliver ahead of the open. 
• In the economic calendar there is nothing other than just the EIA report of Crude Inventories at 10:30 am.

Key Levels (ESH23) 

Support & Resistance for the intraday 

Chart (SPY)