On the upside we will look at the usual signposts should there be a counter trend rally to the overnight trade. As such it is a potential downside break out level. It could be argued that this RTH Low is the low end of the balance area as value has been tracking relatively unchanged from the value area of that day for five subsequent sessions. The lowest Key Level listed above is the ONL which also corresponds closely with the 1.7 RTH Low. Overnight inventory is close to 100% net short and we are currently ticking in the mid to lower third of the overnight range. While that does put gap rules into play, we are well off of the ONH and also not outside of the larger balance area. Both sides currently underwater but earlier action saw S&P’s down by about 17 while Nasdaq 100’s positive by 5.Īs of now we are opening out of range on a true gap lower. The RTH session can be a very different animal from the overnight one, but those are the initial impressions.įutures a bit divergent on a small gap down this morning possibly on the heels of bank earnings and digestion of President Elect Biden’s unveiling of economic stimulus package yesterday evening. Given the size of the gap above us and the fact that overnight activity filled very little of it, and we are currently well off of the ONH tells me that short covering may be already on the wane. Failing to cross the ONH today would be a sign of weakness. If they don’t, we have a WWSHD moment which gives us some M.G.I. The market doesn’t like gaps and gaps should fill. Opening prices are going to start the day within that gap. Pulling back to a wider view shows us that there is still a very large unfilled gap above us from yesterday. This morning’s solid gap higher has buyers building on that low. That turned out to be prescient as yesterday’s low in the SPX cash was right to the 50SMA daily where a poor low was formed and short covering ensued. Yesterday, I mentioned to shift your focus slightly to the “bigger picture” items that everyone can see. ✔ Trade less often and with more precision and with a framework that gets them the gains they desire ✔ Run after tiny profits while suffering large losses that wipe out many days of gains ✔ Are skilled at reading overnight action & will recognize opportunity when everyone else is anxious ✔ Make foolish decisions by starting to trade right after the bell everyday ✔ Know when to go for bigger gains rather than scalp for small moves because the odds favor it ✔ Are constantly confused and always asking “what is this market doing”
✔ Are prepared to make money with daily insights and all the key levels marked off on their charts for a successful day ✔ End up making trading decisions solely on guesswork and feel a.k.a GAMBLING, a surefire way to lose all your money ✔ Stay on the top of their game by being aware of the difference between price vs value ✔ Don’t understand the difference between price and value, therefore make decisions out of fear because of fast moving prices Traders Who Don’t Start Their Day With Premarket Perspective Vs Traders Who Do
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