Wanting a Dip

Sometimes we find ourselves wanting the market to behave in a certain manner.  When I went over all the charts this morning, my first thought was this rally is getting a bit long in tooth.  Then I observed a few more charts which firmed up my expectation that we may see a bit of a pullback materialize today.

But then I wanted the dip.

There is an old lesson in this thought process.  You can build expectations, but to want is to impose your will.  Imposing your will, or demanding, that the market conform to your expectations is like being mad at the ocean for washing your home away, irrational.

Anyhow, as much as it’s my expectation that today we see a pullback materialize, the market could just as easily continue climbing the wall of worry or trade sideways.  The overnight profile is top heavy but mostly balanced and we’re coming into significant resistance at 1682.50.  It didn’t surprise me to see the market stuck just below 1682.50 which represents the value area low of the distributions left behind in early August. This level is huge today, along with 1684.50 (VPOC).  If bulls can show price acceptance above these levels, we’re back into this upper value, and may rotate through it sooner rather than later.

Otherwise I’m looking for a pullback.

We had a poor low yesterday seen on the profile as a double TPO print.  If that gives way, I’ll be looking for gap fill trading to come in, pressing down back toward Monday’s high at 1671.75.  How much of this gap the sellers are able to fill (if any) will be an interesting piece of market sentiment as we close out the week.

Note: Today is contract rollover meaning many future traders switch to the December contract.  I will be watching the volume on both contracts and migrating over to the December contract when it trades move volume.  The above price levels are in reference to the September contract.