The E-mini S&P 500 is up by about 0.3% and trading around 4586 in today’s session. The daily interval is imbalanced to the bullish side, exhibiting a current bracketing behavior. Traders are leaning on the extremes to conclude rotational scenarios in the short-term perspective. Absorption is a possible scenario around the swing highs, which could lead the market to pull back to reload on core long positions. Another possibility is that the current contraction could be setting the stage for higher prices, depending on the job report on Friday and the development of the monetary policy path.

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Looking at the macro perspective of the volatility index, we can observe that negative volatility for the year has a bullish effect on equities. However, it is about to test the lower extreme, which might initiate long liquidations and core short positioning in the median to longer-term perspective.

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The daily volume profile perspective shows an inside day and the current absorption behavior around the highs. This could initiate an inside day failure for a pullback in today’s session while the market is in a bullish rotation, exploring higher prices before long liquidations come into play. Thin volume in the prior profile might highlight lower interest in higher prices and could act as a selling tail. The slightly p-shaped structure of the current monitored profile might be bullish, with the auction process above the particular POC level.

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