I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,121 Blog Posts

Huge Overnight Session

Europe took to the main stage overnight both with their economic reports and news bits revolving around the Greeks. We’re heading into US cash open on the tails of a historic overnight session featuring range well beyond second sigma and volume nearly as elevated. On the Nasdaq, 60,000 contracts is the 2nd sigma threshold, we are nearly exceeding it with just under an hour until the open.

The standout feature of the session is a huge, 41.25 point rotation lower right around the time German Employment data was released, followed by a 40.50 point counter rotation higher to effectively undo the selling. Since then we have churned between the peak and valley. The selling managed to take back nearly the entire range of Wednesday’s trend day before finding the responsive bid. It’s interesting to note that buyers came in right around the 5am Euro-Zone CPI data—a very news/headline driven market.

Fortunately we only have one item on the US agenda today, Factory Orders at 10am.

Yesterday we printed a normal day-type, a structure that’s anything but normal, with a 5.66% occurrence rate since January 2013. It featured a big push lower early on, but no range extension. Instead neither sellers nor buyers became initiative. Instead we worked the rest of the day within the range.

It speaks to the developing balance we’ve been discussing since two weekends back. We are in a 2-timeframe market meaning both locals and longer term participants are active In these conditions, intraday levels can become less reliable and it’s prudent to give more weight to the higher timeframe levels presented by the developing volume profile. With that in mind, you will notice I am only presenting the volume profile below to emphasize these price levels.

Heading into today, my primary expectation is for buyers to work into the overnight inventory to close the gap up to 4521.75. Look for buyers to continue up to target the overnight high 4529.75 with a stretch target of 4543.25.

Hypo 2 is a quick push up above overnight night 4529.75 and beyond to close the gap up to 4543.25 where we find responsive sellers who push us back into 4530.

Hypo 3 sellers push early to test yesterday’s low 4486 but cannot take out overnight low 4480.75 and responsive buyers push us back up for a gap fill to 4521.75.

Hypo 4 sellers push down to 4460.50, look for responsive buyers here otherwise a test down to 4450.



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  1. Raul3

    hypo 3 so far, bracket play

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  2. MBull

    Super analysis thanks, I wish i knew what on earth is going on in your charts though.. can i ask what you use?

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    • bruce keller

      He might use different stuff, but I’ve seen a ninjatrader tag or two. Left facing volume is sellside, right is buy side. Otherwise, shrug. 😀

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    • Raul3

      it’s multicharts, 15 minute bars, the sideways red and green distribution on the left is a volume profile, it tracks the number of contracts traded at each price.

      I look for bell curves to form.

      The info on the right edge of the chart is the same thing, only it looks at more data.

      The one of the left only is looking at these last few days of overlapping action

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