Pre-market Update
Wednesday October 18, 2023.
Image 1. Monday and Tuesday RTH and Wednesday ETH as of 8h30 EST
Wednesday Missal
A quiet overnight session following Tuesday’s attempted break of balance to the downside and subsequent rejection back to the upside. We managed to break the RTH poor high at 4419 before selling off and closing just over 4402. A double rejection.
The profile formed a triple distribution and these are the areas we will use for clues today (above 4404 and below 4384). We are now in six days of balance, winding up for a larger move. As of yesterday both the weekly and daily are OTFU - but traction above the break to the upside was tellingly lacking. We are back in a six day balance (image below). So keep that 4404 in view - buyers want to see consolidation (time) above.
Keep geopolitical events in mind as we go forward (not necessarily today! but we are in a very grave situation in the Levant).
Overnight action shows a reasonably strong presence of sellers, with 4390 acting as a session pivot (note the heavy red delta below). This can be used as an early reference into the RTH IB. See the day’s plan and levels below.
Image 2. Six day balance profile
RTH Plan
Pivot 4404. This is just above the closing M period spike high and a point of contention. Buyers look to a strong close above to set up further tests of the gap. Plan is largely unchanged as we are in balance.
Buyer scenario. IB close over 4404 can target 4414, an area of buyside liquidity, with poor high 4423 further above. A break of this can fill the gap further, with potential resistance at 4435 and final gap target 4446. Refer to the weekly plan for further structure above.
Seller scenario. Pressure below the 4384 LVN likely puts players in a position to test 4373. A break of this level on volume could see sellers aim for NPOC 4360. Further weakness (lack of bid) would likely see the psych level 4350. Finally, watch NPOC 4337 below once again.
Volatility is heightened. VIX above 18.6 will see selling pressure, watch 19.37 above for resistance if the VIX begins to move. On the other side, buyers want to see VIX climb down below 17.42, which can see some support (resistance on the indices!). Below 17 can see buyers filling the gap above on ES.
Longs wants to see TSLA bid over 255 and AAPL over 178.5 - both which can lend support to the indices. They look on the weaker side at this time. Gold (GC) and crude (CL) are markedly risk-off as tensions in the Levant continue to boil. BTC is an odd one suggesting risk-on, but it will need a solid hourly close above 28.9k to confirm.
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