September 5, S&P500 Premarket Plan and Missal
Bull-ISM
Image 1. ES daily TPOs
Time spent is time meant. Remember that the more time we spend in an area, the more participants agree that these are ‘fair’ prices… erm, recency bias and all that. We have Bird Brains after all.
So the key for buyers is a bid OUT of the low 5500s and back to a the area of ten-day balance. Sellers are keen to fill the gap to 5488 below. The bears are just a little bit closer, but that doesn’t mean they can’t get trapped.
Fundamentally the picture is not great. I don’t care about pundits, twitter furus, and midwits (Nope it’s Lily I’m looking at you) talking about how this time is fundamentally different. When have we heard that before? The core picture is not great, with high and persistent (and soon turning) inflation, consumer credit drying up, and jobs numbers just not lining up with the reality being painted for us. Don’t believe me, then peel back the top layer of employment numbers.
In other notes, I’ve had several requests from Birdscribers for the next educational piece: either a trading psychology guide, or a ‘what the hell is a pivot and how do I find it’ lesson. Leave your comments below and I’ll focus on one topic for the upcoming writeup. Or ask me about Chilean architecture, cloning fruit trees, or jazz and I’ll consider those, too.
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Crow’s Nest
The overnight session is on mixed inventory as of writing (7h00EST) but looks be to turning south. I’m primarily focused on the PDL at the open, which globex has already tested.
*Update: a new ONL as of 8h30EST and I will continue to monitor 5511, an old level I pulled out of the shed (just kidding it’s a liquidity zone).
Image 2. ES partial balance and daily profiles
Thursday Plan and Levels
Pivot 5540. This is Wednesday’s closing spike high - liquidity grab or testing to see what’s above? We’ll find out today. It’s also a interesting area of ‘delta spilt’ - where order flow opinion was divided. Check out the image below.
Image 3. ES Wednesday RTH profile
The ADP data came in below expectations (not below mine, just Lily’s) and we have ISM services data at 10h00EST which can see movement pick up afterward. Range expectations currently given by the model are 48 points with a 13 point possible overshoot.
a) Defense of the ONL / 5511 or a LBF, close above pivot targets 5551, 5562 to 5568 where selling may be encountered. Momentum would then target NPOC 5577 / balance low. Recall further levels 5595 and 5602.
b) Time below pivot and a break of the ONL on volume target 5495 and 5488 gap fill. This area could see a responsive bid with congestion of the ATH AVWAP and swing low AVWAP around 5596 (Image 4). Further weakness would aim for the 5469 NPOC and 5455 buying delta at an extreme.
c) VIX pivot unchanged at 20.90 with seller strength possible above 22.90, and buyers potentially supported with the index below key psych level 20.
Image 4. ES Daily levels
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