Bearish, but close to the target zone.
Potential opportunity to sell from higher levels, but choosing the right spot could be tricky.
Brief article as I have been busy today, but from next week we will look at this style of article, the night before.
Bullish setups today
We may have just seen the low of the day at 12095, a retest of this level and hold could open up buying spots
If we break the low of the day, this could be a bear trap allowing buyers in
Yesterday’s POC could be a target, alternatively the 330-350 (futures) level would be a great target as sellers are interested up here
Bearish setups today
We opened a gap this morning, so one option is a failure to break above the gap and the gap resistance offers a shorting opportunity
If we take the gap out then the VAL (Value Area Low) could be an area of resistance 12179 (futures).
If we break back inside the Value Area then a retracement back towards the POC from yesterday is interesting to short from
Let’s go back to the beginning of the session and replay it.
The day starts with a 20 point gap higher which forms the IB high. There is a rejection at this level and price closes the gap and carves out the IB low. So we have an IB range of 218.5-287.5 (futures) which is around 70 points. The opening two hours completes with a test of the IB high and a retracement to vwap. The POC from yesterday and the VAH from yesterday remain naked. The day type is still uncertain but the price continues to trade within that range, suggesting we have a ranging day ahead of us. Early afternoon / late lunchtime we get the first clue of the day type as price breaks below the IB. This first break (around lunchtime) was actually quite weak because it barely broke the support and we found a rejection quite quickly. However, the second break around mid-afternoon was more significant. At this stage my thinking is one of two things:
- We are seeing a trap. We break below the lows, sellers jump in, but buyers take control and push prices higher, potentially towards the sell zone nearer to 336 again. A retest of yesterday’s high.
- The sell zone is no longer valid and this is actually the continuation break lower, towards the 12050 zone. Wait to see the strength of the break. Then wait for a pullback to test the underside of that break for a shorting opportunity.
With these options, you can plan your trades accordingly. Price retraces back towards vwap, not quite reaching it, but leaving behind a small Low Volume Node in its wake. The LVN gets zoomed up and down again, but the price is back inside the deviation low, underneath vwap.
We end the session continuing in a grind lower inside a bearish channel.