The premarket is seeing buy flow entering the market, albeit thin, as the USA comes online. The action was enough to push us outside of value and nearly above yesterday’s range. This creates an elevated risk/reward environment where intraday positions have a better opportunity to flourish.
Given the proximity of the overnight gap, we may see sellers attempting to fill it by trading us back down to 3566.75. If this is to occur, I think the time of day is critical. An early push from the sellers which gets rejected by buying would set the stage for a strong session.
If instead we see a mixed opening trade, predominately driven by buyers, we have to be on watch for an afternoon fade.
I have highlighted both these scenarios on the following 24-hour market profile chart. Below the 24-hour chart is the RTH chart which I have left blank but you can see the relevant value areas on high volume nodes, especially if you click and enlarge the image:
