Tuesday 17th September – ES_F Review

Good morning Traders,

Difficult day yesterday, personally speaking I didn’t have a great read of the market as I was distracted with some life admin! Whilst we were strong off the open, we had significant rejection out of Friday’s range with prices being front-run on the short side. This was our early clue for how the day would pan out during B period. With FOMC due tomorrow, traders are being pragmatic and perhaps scaling out of positions before any potential volatility hits tomorrow evening (GMT). We spoke about looking for buying opportunities in yesterday’s post, and the buying opportunities didn’t properly arrive until E & F period and the printing of a poor low put me off buying during F period. But for the most part we had a day of balance, and when we see balances, the best strategy is to play the edges. Something I spotted during my review last night, was the internals really coming off during D period, which in hindsight was a great indicator to go short, but I’ve learned that I went into yesterday with a long bias, and I had the blinkers on for short trades.

Overnight, the bulk of our inventory is short, so we’re slated to open 8 handles down from last nights close. As always, we’ll use A & B period to allow inventory to correct as well as looking for clues as to what type of day we’re likely to see. For the most part, the day before FOMC, we often see straight up balance, with no one willing to push significant order flow in one direction in the context of a rate decision due in the next day or so.

So, off the open, we’ve got some areas to look at – the single prints on the profile from 89.50-90.25 which the market look to fill out a little during early trade. We have a prominent POC from yesterday @ 3000.25 (12 periods wide) so it’s likely we’ll see balance today – my main read from yesterday, is that there were no highly motivated sellers present. We’ll look for how the market reacts to the overnight highs & lows, from there into the singles below, and above we have Friday’s range which is also the T+2 range, so those levels now all come into play today.

Strategy for the day is to expect balance, so we play the edges, until we’re told otherwise by the market.