After the market’s failed breakout attempt of the five day balance to the downside on Tuesday, one scenario was for the market to break out and find acceptance above the five day balance high at 2454.00 on Wednesday. Potential targets were the upper distribution high from the 8/17 selloff profile at 2459.50, and the single prints above to the high from that day at 2464.00. Wednesday’s high was at 2459.75, a poor high with no excess.
If price opens above 2454.00 on Thursday (the prior 5 day balance high) the higher price levels noted in Tuesday’s market profile report could still be relevant.
Acceptance above 2459.75 and back into the excess single prints from the 8/17 selling tail could first target the high from 8/17 at 2464.00, and the wide point of control at 2467.75 and remaining unrepaired anomalies from the 8/16 profile. The matching highs from 8/9 and 8/16 at 2474.00 are within striking distance if the market finds acceptance above 2464.00.
Wednesday’s late pullback low at 2453.00 could be an important early reference on Thursday, depending on where price opens. Generally, the prior balance high (2454.00) should be support if the market broke out higher on strength. If Wednesday’s pullback low at 2453.00 fails to hold and price is accepted below that level, it puts price back into the five day balance, questioning the last two day, low volume rally (NYSE daily volume was very light at 2.51 billion).
Potential lower targets are the single print at 2449.50, previous resistance, acceptance below that level probably tests Wednesday’s excess buying tail. Tuesday’s lower distribution high at 2436.00 comes into focus below Wednesday’s low.
End of month options expiration should bring volatility.
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