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Yesterday we had another low confidence day. The range was just over 6 points for the pit session. The market has gone into a tight range the past 3 days and todays globex is continuing that tradition.
Volume is low - still around 1 million per day since we broke out above 1900.
I can't say how this will be resolved - up or down. My preference is always continuation though. What I do think is that this area may give us confidence to play off once we do break either way. For instance if we do break up, and the top of the range holds, we'll have a bit more confidence in the subsequent up moves. Same if we break down and it holds from below.
On the other hand, if we break up and then break through to the downside, I'd expect this range to expand and for us to rotate around this area for a while.
As per yesterday, this consolidation low is about the 13.75-14.25 area but we could well stop at yesterdays low in todays pit session. Top is around 1924.
I don't have anything specific on the table today. There is an argument for long 14 and short 24s but with the market being low confidence, there might no be much follow through and you might just be better off scalping intraday steps in the profile.
A good example was yesterday - prior days VAL was at 1919. We opened below it - went to the VAL and then sold off. A textbook setup where you'd expect sellers to take it to a downside reference like the prior days low. We moved downto 16.25 and then it basically fizzled out - we got back to 1919 and then pushed through it. No real commitments on behalf of shorts to follow it through.
So if that's the game, it's not really worth looking at the major levels to get a major move.
Weekly Numbers
Range - 1913.75 -> 1924.25
Value 1919.75 -> 1923.25
S1 1809.25, R1 1928
I think that now we have the chance of some higher confidence action.
Based on areas we rotated around (resistance became support or vice-versa), we can mark out a 1914-1924 zone. I see that as short term value right now.
First I'll be looking for 1924 to hold for more upside.
If we drop back into the range, I'll be looking for 1914 to be hit and hold.
If 1914 does hit and hold, I'll be watching 1924 because it may continue along this range if 1924 holds from below.
Anyway - the point is we now have an area of rotation and how we react when we go back there should give us a bit of confidence for trading.
Weekly profile is showing the same thing - a distribution above 1924 and a larger distribution below. If we get into the lower distribution, then I think we'll probe to the other side of it.
Yesterdays Value Low at 1922.25 give us an area below 1924 that may act as support if we get thru 1924.
Weekly Numbers
Range - 1913.75 -> 1929.50
Value 1919.25 -> 1923.25
S1 1809.25, R1 1928
Daily Numbers
Range - 1916 (globex) / 1916.575 (pit) -> 1927
Value - 1919 -> 1922.50
Globex - 1924-> 1929.50
Yesterday, we got a nice push up with fairly decent volume. Not huge volume but certainly better than we've had for a few weeks.
We had a fairly decent move up and after any move up like that, you have to keep an eye out for an equal move back in the opposite direction.
Yesterday we said:
"I think that now we have the chance of some higher confidence action.
Based on areas we rotated around (resistance became support or vice-versa), we can mark out a 1914-1924 zone. I see that as short term value right now.
First I'll be looking for 1924 to hold for more upside."
OK - So I wasn't expecting THAT high confidence a day... we did dip back into the zone - as low as 1921 but it couldn't hold and buyers came back in.
If we break through 1936.75, we don't have much to stop us hitting 1927 and then 1924 below it - so I'll be watching those levels today.
The weekly profile does not much more than confirm the above. We can see there's not much trading from 36.75 down to 27 here too.
On the split pit/globex profile, we can see there's a single at 1936.50 and not much below, so again - no real additional information there.
Yesterday started off looking like a fairly regular "day trader" type day - but once it got going, there wasn't much in the way of pullbacks. So we may see something like that today if we take a drive back down. It was very thin at times yesterday too, certainly earlier in the day. It makes sense to some extent to scale into a position on days like this because it's not so easy to get on a retracement.
Anyway - on the lookout for a big down move, especially if we test the highs and then roll down. Also looking @ 36.75 and 27 as lines in the sand - they could provide support. A break of 36.75 should see us accelerate a bit.
Weekly Numbers Range - 1913.75 -> 1942
Value 1917.25 -> 1926.25
S1 1809.25, R1 1928
Daily Numbers
Range - 1921 -> 1940.75
Value - 1927.75 -> 1940.75
Globex - 1937.75-> 1942
