late day liquidation, close back within previous day’s range

A low confidence, low volume trading day Monday once again saw short term traders taking the market too high for the day time frame traders. A late day liquidation saw anyone that bought after the open, and held, get underwater in the final 30 minute trading period.

Buyers stepped in again late just one tick above the open print at 2110, a weak reference that should be retested if the market opens within range. Although another poor high exists at 2118, the point of control at 2115.50 could provide resistance.

late day liquidation

Traders are apparently gunning for the S&P all time high, and with a light news week and lack of serious sellers anything is possible. But below the market exists a lot of poor structure left from emotional short covering, including three previous unfilled gaps.

S&P 500 emini Daily Chart

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breakout from 7 day balance

break out of balance and accelerate

Monday’s break out of balance was on low volume, just 3.4 billion on the NYSE. The rally in ‘I’ period at 2105.50 was exactly at the previous rally high – a mechanical level suggesting shorter term buyers in control. Acceptance back into the previous 7 day balance could target the low of the balance, and possibly below.

The poor high from Monday could mean the market has “unfinished business” up there, or the market got itself too long. The prominent point of control should draw price back to it, at least initially.

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