December 5, 2023 Premarket Missal
Buyer test no. 2
Image 1. Rejected upper distribution.
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Minister’s Missal
We opened well below our pivot as Friday’s upper distribution was rejected in Monday’s trade in ETH. The 4579 effectively capped trade during the RTH session. Buyers attempting to recoup ETH prices on Monday’s open met responsive selling, and short initiative saw a full traverse of balance VA. However sellers were not able to carry momentum further on dwindling selling volume, leaving a poor low a few points below IB. This was only a point below our final seller target for the session, 4555.
Refer to my prior Twitter (X) posts for the ‘IB Lean’ setup. Monday demonstrated a classic example on Monday, especially given the poor low printed at D period. This led to a reversion trade into Friday’s VAL, which encountered further responsive selling. The two-way auction agreed around the 4569 price, although with little evidence of buying energy at 4580 despite the close above TPOC (note the lack of buying delta in the image below). Some of that weakness may have carried into the ETH session.
Image 2. Thursday and Friday RTH, Monday ETH as of 6h30EST
So far the Friday breakout attempt was rejected by sellers. With that said, buyers must attempt a meaningful close above 4604 to potentially light the engines again. Either way the consolidation is gearing up for a cleaner move. When that will be I cannot say but recall unemployment data on Friday (as well as earnings and consumer sentiment).
As of writing Tuesday ETH looks somewhat limp while the overnight POC remains below Monday’s RTH TPOC and VPOC. Lastly, Monday’s profile is suggestive of absorption in its ‘p’ shape - note the LVN at the stem of the ‘p’. We can use this 4563 price as a pivot for the RTH session ahead.
Read below for today’s plan and levels.
Monday Plan and Levels
Pivot 4563, Monday’s LVN. Seller pressure below likely means a test of passive buyers interest around 4550. Meanwhile buyers will likely focus on an hourly close above 4580 to potentially see shorts cover positions from the prior session.
Buyer scenario. Holding above pivot can test 4580, with 4590 and 4604 above. An hourly (or better yet daily) close above the final target can lay the ground for trade into 4616-4625 although this could mean another session or two of buyer strength. Keep the targets in mind however.
Seller scenario. Time spent below pivot probably sees an attempt to clean up the poor low from Monday’s session as 4554. A break this time could see prices falter to balance low 4545, the buying tail 4533, finally the NPOC 4520. buying block (see image 3 above) to Friday IB mid 4573, where responsive buyers may be found. Further down are PDL 4563 and NPOC 4555.
Notes. I was overly aggressive with the VIX 13.51 level yesterday but it will be relevant today - prints over this favors selling. Refer to the graphic below for the lay of the land, making sense of the structural levels above.
Image 3. Structural levels and balance areas
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