Early trade Tuesday in ‘A’ period (the first half hour trading period on the above S&P chart) stopped exactly at the base of the spike from Monday, which also coincided with the overnight high and overnight session’s half-back level, very mechanical day and short term traders references. Price sold from there down to just a tick below the overnight session low, another very mechanical, visual trader’s reference.
Tuesday’s trading day was contained within the 12 point overnight range from Monday, forming a very prominent point of control at 2079.50. It is also another inside day, trading completely within the previous day’s range.
Being another inside day, possible trade scenarios (again, barring another gap open) for the next trading session would be for price to look outside of either end of balance and accelerate, or look outside and fail, returning within the balance. If look outside of balance and fails the destination trade is the opposite end of the balance, and potentially beyond. Any breakout of balance should have better odds of follow through if price first visits the very wide point of control from Tuesday at 2079.50 and then reverses.
There is also the possibility of price staying within balance, but with the upcoming Brexit vote that might be the lowest odds of the scenarios. Existing Home Sales and Federal Reserve Chair Janet Yellen’s semi-annual testimony before the House Financial Services Committee are also scheduled for 10:00 AM EST Wednesday, followed by the EIA Petroleum Status Report at 10:30 AM EST, each of which could cause volatility.
Calm before the brexit storm?
On Thursday, June 23 The United Kingdom will decide whether the U.K. will remain a part of the European Union. Polling results will be reported throughout Thursday’s U.S. trading day, with the official announcement expected to be released early Friday morning, June 24th.
Significant market activity is expected for later this week resulting from the Brexit vote.
More information on the upcoming Brexit referendum can be read here.
(the above post and every post on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer
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