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Ongoing Narrative / Commentary
Solid gap lower within range thus no true gap. It is, however, noteworthy where the gap is opening which is right in the middle of the large single print section of yesterday’s RTH distribution.
Single prints are areas of emotion. Yesterday’s run from the open was a lot of shorts and FOMO traders hitting the button at market and repositioning. Now that we are trading back within that area, assume that it offers little in the way of support or resistance should we move in either direction. The RTH Low is a Key Level because it represents the area where 100% of those emotional buyers would be wrong.
The high was poor yesterday and should be carried forward as a potential level for a break higher in order to repair that structure. Note that when poor highs develop within a session, the odds of getting the first move which backs away from the poor high are very strong.
- Overnight inventory is balanced and we are still opening within range so the direction of any opening drive is not really clear. Better trades should develop later rather than earlier in today’s session.
- Any early rally can target the Top of the Single Prints which should be resistant. A fade off against that level is a solid trade setup.
- Due to the lack of support of the single prints, assume that any early opening drive lower towards or through the ONL keeps bias to the downside and puts the RTH Low into play. A lot of today will be about whether or not this either happens and moves lower or happens and gets rejected and comes back into range. That will tell us a lot about the longer term direction.
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