Market Profile Trading References for Wednesday, January 26

Monday’s poor high was repaired Tuesday, with the ES this time mirroring crude’s upside move. Key levels to watch Wednesday are a very prominent point of control at 1890.50 and the single print below at 1886. Trading below 1886 could signal more downside, although Tuesday left another poor high – just one tick below the psychological level of 1900. 1902.50 marks the latest recovery high, trading and finding acceptance above that level could squeeze the shorts.

The stock markets are still not trading on their own and are still following crude oil, making day time frame trading references less reliable.

FOMC Meeting Announcement 2:00 PM ET
The Federal funds rate target is expected to remain unchanged at a range between 0.25 to 0.50 percent, where it was lifted from zero to 0.25 percent at the December FOMC. Global events were not emphasized in the December statement but, given subsequent evidence of slowing in China and severe volatility in global markets, such risks are likely to be cited prominently in the January statement. On inflation, the December statement cited confidence among policy makers that inflation would begin to rise to their 2 percent target, but a change in wording is also possible here given global slowing and the continued collapse of oil prices. Four new voting members are rotating in from district banks and four have rotated out which will focus attention on the breakdown of the vote. Voting was a unanimous 10 to 0 for liftoff at the December meeting.

Federal Funds Rate – Target Level

Prior
0.25 to 0.50 %

Consensus
0.25 to 0.50 %

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Monday, January 25 Recap

Rotational day early Monday with lack of confidence in either direction, leaving a poor high at 1895.75 just a single tick above the overnight half back. Following another crude oil selloff the profile then formed a second, lower distribution. Areas of interest for Tuesday are the top of the lower distribution at 1875.75 and the base of the spike at 1881.25.

There are also un-visited wide POCs below at 1864.25 and 1820.75 from 1/21 and 1/20 respectively, along with a poor low at 1804.50, the recent selloff low.

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