With close to 100% short inventory coming into Monday’s regular trading session, and probably many traders still short from the previous day’s 50+ point selloff rout, Monday’s pit session opened roughly 16 points below Friday’s close and promptly short covered from the opening bell back into the previous range, one timeframing higher for the first seven periods. Amidst cautious comments coming from the Fed’s Kashkari and Brainard, price repaired all of the multiple anomalies left from the poor structure in Friday’s market profile chart.

After grinding higher most of the session the market turned volatile in H period following Brainard’s comments, quickly spiking 5 points higher in H period before selling off 13 and ending the one timeframing, but rallied off the I period low and resumed one timeframing higher into the closing period.

The market closed on Monday within Friday’s range, not achieving the outside day.

The daily chart is one timeframing lower, the prior weekly chart printed as an outside week, and the one timeframing higher on the monthly chart has ceased, all negative factors for strong upward continuation.

Areas of interest from Monday’s wide range market profile chart are the upper and lower distributions/balance areas. Price acceptance below the upper distribution at 2154 targets the lower distribution, acceptance back into that lower distribution could see price test the I period pullback low at 2137.25. Acceptance below 2137 could target the lower end of Monday’s lower distribution and excess single prints.

If the market finds acceptance above Monday’s upper distribution and Friday’s high, price could target the lows from Sept. 2nd and 6th, and possibly the GAP fill at 2175.75 from Sept. 8th. Large gaps are seldom filled one or two days after they are created, therefore with light news Tuesday the odds probably favor seeing price trading within the last two day’s wide range. But with Quadruple Witching on the calendar later this week and the current geopolitical environment, anything is possible, in either direction.

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