Short Term Traders
Are institutionals buying here?
Image 1. Rugged life of a market maker
Day Review
Buying was initially constructive overnight, with the ETH profile showing absorption in the Asian session above the prior day POC. The European session opened and eventually broke to the upside, landing a couple of points below our 4545 buyer target before sellers stepped in after the data release. Employment came in soft, PCE met expectations, and spending was up while income down. Not a good outlook for a strong economic picture as we continue to add private (and public…) debt at high rates. The market has yet to digest the data; bad news is not necessarily good news.
Nonetheless we opened at prior day VAH, buyers stepped in at open but found selling at the European spike halfback, then rotating into the ETH lows where buyers stepped in to traverse into the ONH into the end of IB. An important point here - very often you will see rotation at the beginning of C period which many suggest is ‘manipulation’. I prefer to see it as the tone of the market established in the first 60m, and yes both traders and algos respond to this with respective parameters.
So it is that C period saw rotation through the open, OTFD into the prior day VAL and a few points under our day pivot, where we saw excess as buyers stepped in at prices perceived low. Another rotation traversed VA however buyers failed to maintain above 4530 and sellers once again appeared to make a NLOD into close on heavy delta. Despite closing just below prior day VAL, daily POC moved higher - we remain OTFU on the daily.
Image 2. ETH, RTH profiles.
Image 3. 5-day; balance; and daily profiles
Tomorrow’s Missal
Plan is mostly unchanged. We could see movement tomorrow on pre-market data. Buyers want to maintain 4512 to preserve short-term control. Sellers look to return prices below 4500. Pivot 4523.
AAPL over 187.9 and TSLA above 260 could see some further squeeze in the indices. VIX under 13.3 may be supportive of buying into the long weekend.
Buyer scenario. Defense of 4512 can retest PDH at 4540, a break of 8/10 highs at 4545 would target 4554/8. Further above is 4570.
Seller scenario. Sellers once again look to end OTFU. A defense of 4533 could target 4496. They would then target poor structure below 4490 to 4458. Buyers may step in at 4476 or weekly halfback.
Notes. Wages and employment at 8h30EST, and PMI at 10EST conclude a data-heavy week. Anticipating some volatility, especially premarket.
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