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Value Areas and POC figures for /ESM8 and /NQM8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.
Balanced to net short overnight inventory; entire overnight range within yesterday’s RTH range. Market is in balance for now.
This is an important time to understand market action within the larger context. Here’s what we know:
-The market touched a key 61.80% Fibonacci level two days ago and backed off.
-The next day was bearish but only down to the 50% Fibonacci level and missed filling a gap by a few ticks.
-Putting 5/15 and the subsequent overnight session together on the chart (you can see it above), there’s a perfect 45 degree line from that RTH low to the widest part of the overnight session. Tells us that sellers are stuck down there.
-Yesterday we move higher immediately off of the open but end up having more of a balancing day rather than a trending day.
What can we project forward from the data market generated information that we have above?
1. The market is balancing between those two Fib levels for now.
2. If the lower one doesn’t get taken out, the odds would favor a higher move at some point.
3. If we start to find acceptance down below the lower one, then the market may be telling us that the 61.80% Fib touch was firm and is a top.
Just like when the market is inside of the prior day’s range we expect smaller moves, we should also think the same way about the larger range. Breakouts, fades, etc can and do fail when market is balancing. Remember that the move from the 5/3 low to the 5/14 high was quite large. Thus far we have digested (consolidated) very little of it. For now the way the market is acting I would say it wants more upside, but it may take a little time to do that. Know where you are in the “cycle” and trade accordingly.
Have a great day,
peter
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