Big Waves Kick Up Overnight

Action in the globex session picked up, and for the first time since the weakness began we are seeing abnormal (2^nd sigma) range and volume.  Price pushed higher initially overnight but stalled at yesterday’s mid.  From there we saw a 43.25 point rotation lower then a continued grind lower.  Price pushed the ATR low and found buyers just ahead of the major composite VPOC.

The economic calendar is features the crude oil/distillate inventory data at 10:30am followed by a monthly budget statement at 2pm.

Yesterday we printed a double distribution trend day down.  Sellers managed to close the weekend gap down to 4520 affirming the idea that weekend gaps are contrarian events this year.  From there sellers continued pushing into last Friday’s range.  The tape was slow and methodical.  We closed out the session with a bit of a ramp.

Heading into today, my primary hypothesis is for sellers to gap-and-go lower.  Look for them to target the 7/10 range gap at 4426.50.  If they can breach this level then look for a continued move to fully close the gap down to 4409.  Use the 4400 century mark as a stretch target.

Hypo 2 buyers push into the overnight inventory but fail to reclaim yesterday’s range low 4485.50.  Price rolls over and works lower to take out overnight low 4454.25 and kiss the CVPOC at 4450 before 2 way trade ensues.

Hypo 3 buyers reclaim Tuesday low 4485.50 and close the overnight gap up to 4511.  Look for a continued move to target overnight high 4525.25.

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