The Nasdaq is off to a slow start this week, and the tranquility continued into globex overnight where both range and volume compressed to below-normal levels. The overnight session is pressing its lows as we head into cash open after taking out yesterday’s high last night.
At 8:30am we have Housing Starts/Permits which came in worse than expected. We have Industrial Production stats just before the open at 9:15am and most importantly the FOMC minutes at 2pm.
After the holiday on Monday, yesterday we saw 2-way short timeframe participants performing the balance trade atop 2 weeks of rallying. Buyers managed to extend the range up slightly. Heading into today we are trading inside yesterday’s balance range.
Early on my primary expectation is for the two-way trade to continue. I will look for signs of a higher timeframe around the open, but they may not become active until the afternoon. I am looking for an open auction inside yesterday’s range to test down to 4272.25 before finding responsive buying back up to 4386.50. from there I will look for buyers to made a run at overnight high 4390.50.
Hypo 2 is sellers push through the low-end of yesterday’s range 4272 and continue working lower to target the naked VPOC at 4360 and then a stretch target of the gap to 4345.75.
Hypo 3 is buyers are aggressive early, take out overnight high 4390.50 and work toward the measured move target of 4417.50.
Note, the volume profiles and market profiles are quite similar today:
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do you think Elon gives a fuck what the Fed has to say? he’s busy tinkering away at his side project to shake up the entire utility sector and change the country as we know it.
you know, side project cuz he’s bored with building space ships at the moment. When he gets back to it, his next task is to have said spaceships fucking parallel park effortlessly in downtown Manhattan.
of course he doesn’t care, swing traders don’t particularly care either, but contextually, I care. I traded the first 10 minutes and knew the rest of the day would be a minefield of minutia until after 2pm. Thus I can take a nap, work on other stuff, etc etc, without much sweat. C0nt3xt
ps Elon Musk #FTW
Was reading Dalton last night. He suggests volume profiles less useful than market profile as they are distorted at open and close of trade each day. Did I understand that correctly?
You did understand Dalton correctly, but I tend to disagree with him. Volume profile is actual trades, while market profile is just time spent at a price. To my understanding of auction theory, it’s less important how the volume took place, only that it did take place.
But I also track the opening action closely and often see it having an effect on the the day several times so perhaps I see it in a slightly different light.
insightful, thanks