Pre-market Update
Thursday October 12, 2023.
Image 1. Tuesday and Wednesday RTH and Thursday ETH as of 7h50 EST
Thursday Missal - CPI
A quick note ahead of CPI which lands at 8h30EST. If a hotter than expected PPI was a guide, the same may be said of today’s print. Especially as oil prices factors into nearly everything we buy - from goods to services. The market took the bad news yesterday without flinching. While selling down initially, we had a ‘V’ recovery that made a NHOD by a couple of ticks by close.
Overnight action today has seen the buy up continue as the sessions has been well bid despite a sharp correction at the European open. That selloff did not even touch the PDH, which shows just how much interest is being found on the way up. But is this a case of too far too fast?
Looking back, the title of our previous Missal “Killer Instincts (at 4400)” was doubly correct, first taking out greedy longs in the quick selloff, only to turn around to smash the new shorts. Something about the prior day close seemed a little ‘off’ - full disclosure I did buy puts at PDC as a form of downside protection, took on some water at the RTH open, and made out for a poor 1:1 risk to return (R:R). Not my best trade but I managed it OK, deciding not to stop out when I noticed weakness at the open - a classic look above and fail! Indeed I added to my short, but with futures.
RTH Plan
Pivot 4404. I could not find a good reason to change this from the prior session, despite the bid on ON POC at 4420 at time of writing. Same can be said of our levels. This level represents the breakout yesterday in the M period spike at close, and sellers will have to find acceptance below to target lower prices. In case of a gap open, a fill early on could suggest seller strength, while maintaining the gap (look below and fail) could see attempts at higher targets. Keep this in mind!
Buyer scenario. IB close over ONH / 4425 can target a gap fill to 4446, where long-term sellers are likely to be found. Further above is 4459, and 4464 would be the last target for the day but these last two may be a long shot. Just be prepared in case you see further strength at any of our levels!
Seller scenario. Sellers need a return below 4404 and an hourly close (these are 30m periods!) below, rejecting the breakout. Our downside plan yesterday worked perfectly, filling singles to 4377 almost exactly, this is where sellers need to target to break OTFU although 4390 may find a bid along the way. Further below is an old friend: 4365-7, which represents a major victory for sellers if achieved.
Notes. PPI pre-market 8h30EST. I may issue an update if things get ‘wild’ although our levels will likely be sufficient. Trade well, trade easy.
Gold (GC) is signaling risk-off, a bit contrary to the dollar. We may say the same of BTC. How AAPL reacts around 180 can give clues to buyer or seller strength - note the potential for an AAPL gap fill in tandem with ES and NQ. Similarly, TSLA at 266.70 is a level to observe, longs would want to see volume come in above this level for a test of 270.
Tip Jar - your support helps to keep my work going!
Don’t maintain bias in the face of contradicting information! Capital preservation is key.
This is not investment advice and I am not a qualified licensed investment advisor. All information found here, including any opinions, commentaries, and suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here. As always, conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.