One of the better trading days yesterday, with loads of clues in the profile (particularly in B & C period) about what type of day was about to unfold. When the market traded down to 2960, selling got very weak, so we were able to take a few trades around this MGI. The rally in M period before the close was unrelenting and it blew out plenty of stops above the G period high, where we closed on highs.
Overnight inventory is fairly long, and it’s had really nice rotations between developing value area high and value area low. The context of the week, and the time since the break above 2947, is that we’ve got weak buyers, but even weaker sellers so we’re slowly grinding higher towards 3,000 again – with the right amount of orderflow, it’s possible we take that level today. Yesterday’s trade, tried to close one of the gaps to the down side, trading down to 2957.25, roughly 8-9 handles below the previous low of this new balance zone. Whilst we spent 5 TPO’s of time down below 2960, it was clear there was no acceptance for sellers to initiate shorts to take it lower, and the buyers just brought it back towards value on the day.
With any period of balance, failure to get acceptance lower, should result in a test of the upper end of the range which is in and around where we’re due to open shortly. The high of this balance period is 2990.25 so if we can take that out, and gain acceptance above that level, we should pave the way for 3,000. As always, we’ll be focused on some key levels first and how price action responds during A & B period, along with the strength/weakness of the internals. We’ll need to hold above yesterday’s high in the short term to push to the upside.
To the downside, any clean break below 2957.25 targets 2947.75 & 2939 for the full gap close.
Worth noting, Monday’s trade settle’s today, so references from Monday will be relevant today (see below).
Overnight High – 2987
Overnight Low – 2972
Overnight 1/2 – 2979.50
T+2 1/2 – 2980
T+2 Close – 2978.50
Single Print (Mon 9th) – 2980.50
Yesterday’s high – 2979.75
Yesterday’s Settle – 2978.50
Yesterday’s 1/2 – 2968.50