The market rotated all over the place last night, trading about 13 handles lower from yesterday’s close before finding some buyers. Since then and throughout the course of the evening the market rotated higher in a very orderly manner to regain the lost ground and managed to print a new swing high around midnight.
The overnight high at 1689 is interesting because we typically do not print the high water mark of a rotation during the overnight hours. This is a bit of context that cues us we may see higher prices during an RTH session before heading lower. However, there is no timing associated with this context. It may happen today or next week and there is always the possibility it never gets breached at all, but it does exist.
The S&P coiled up over the early am hours and appears poised for a quick move early on. After that occurs, my expectation is for a consolidation day. Bulls would love a quiet market which resides primarily in the upper quadrant of yesterday’ large candle. And that is my core expectation on the day.
However, emotions continue to run high and this is a choppy environment with asset correlations creeping up, so it is important to prepare for sudden moves. I have highlighted a few price levels below on the RTH profile chart, and buyers do not want to see trade sustained below yesterday’s VPOC at 1672.25. That would indicate value was unable to migrate higher with prices and that the true value of the market is not as high as price.
I have highlighted these prices and a few scenarios on the following market profile charts:Twitter