Debriefing Monday 6th June 2022

Debriefing Monday 6th June 2022

Links

Need to know market risk @ FinancialJuice.com

  • Traders price in a 50% probability of a half-point ECB hike in July.
  • RBA: Because of the economy’s resilience and higher inflation, this extraordinary support is no longer required.
  • RBA Cash Rate Actual 0.85% (Forecast 0.6%, Previous 0.35%) – AUD Strengthened.
  • The Labor Advisory Committee has urged Biden to extend China tariffs – Axios.

Germany sells 0.419 bln euros in a top-up of 0.10% inflation-linked 2026 bond – Bundesbank.

  • At 108.79 and above.
  • Avg yield -2.07%
  • Bid/cover 3.0

Today’s Data

SOURCE: INVESTING.COM

Yesterday’s Market Profile and Price Action Debrief

Market profile debrief 06.06.22

Market profile, debriefing Monday 6th June

ON price action saw a reversal of Friday’s Long liquidation move that closed very close to  the prior week’s settlement and a  key HTF reference point. The stubborn ON lows looked to frustrated sellers who eventually liquidated positions driving prices higher and taking out the NFP days high and breaking above the prior week’s VVAH.  The handover into RTH meant we were opening out of range.  Spike Rules

Open auction Out of Range (OAOR)  4149 and the auction quickly tested back to close the gap to the prior high 4142 and briefly break into the prior range where the ON Singles marker drew in support for the auction to steadily rotate higher to take out the On high 4159 and settling into a holding pattern.  B and C periods looked to be consolidating for a higher push but D period flushed out any hope and it was a quick and punish move lower for longs into the belly of the prior day’s distribution. 

The holding pattern was an important piece of information and once price was below the open all ideas for long should be on pause.  The failure of longs to defend key references the lack of aggressiveness of buyers to break above the week prior references such as the Spike left behind from 6/2 are all clues. Delta also aggressively moved lower before the holding pattern broke.  This is work looking over for future moves.

We are seeing weak blows exchanged between buyers and sellers whilst remaining in balance; weak non-excess highs and lows indicate a lack of conviction and absorption by opposing forces. Given the holding pattern, we are looking for signs of change, such as changes in PA or a breach of the extremes. Remember that false breaks out of balance are common, and failure back into prior acceptance is a setup that needs attention.

Multimodal Distribution, Failure of Inside Day breakout, 6 Day Balance

H 4068 L 4107.25 VPOC 4119 VWAP 4134 CLOSE 4119.25

Realistic Targets Given Current ATR

UPSIDE: 4140| 4157 | 4163 | 4183 | 4200 |4220 | 4250 | 4274 | 4303

DOWNSIDE: 4107| 4098 |4080 |4962| 4050| 4032| 4015 |4000|3987

Yesterday’s Price Action Review

ON Update

ON are 95% short into the open with the majority of business being done below the prior close. We are trading perilously close to the lower end of the 6-day balance and I would be expecting a positive response on the open as my base case scenario.

Should we fail to see a response on the open and we take out the prior week’s lows we are looking at a potential break out of the 6-day balance. This is not impossible we need to be looking for signs.

On the downside, I would be waiting to see responsive buyers fails to take out the 4106 area and then target the ON low at 4176 just shy of the prior week’s low of 4171. I am aware that any breakout from these lows may be short-lived given the current environment, but a breakout is still a possibility. TARGET NVPOC 4061 first and see the response. POSSIBLE REJECTION

I will be looking for a weak retest of the breakout area should I miss any impulsive move to the downside on the open. Or to take the trade preemptively with limited risk up at the 4106 area.

On the longs side buyer’s response off the open protecting balance extremes. Any longs first hurdle would be to get us back above prior weeks settle at @4107 and then target yesterday’s VPOC 4120 areas. 4140 is a key area of interest given the rejection seen yesterday into VPWAP and yesterday’s IBLO if buyers can sustain the rotation back into balance.

Potential for longs from the open if we fail at the ON lows.

Opening Bell and LIVE Journal

08:40 CT We get the response off the open we were looking for as ON inventory adjusts but we hold below the 4107 prior weeks settle. Buyers will want to quickly pass this key hurdle or else shorts may re-attempt the prior week’s lows.

09:20 A tight hold in PA at the top of the prior DblTOP/ chop zone leads to a rush for shorts to cover to target the prior close. 4120 target hit and next in line 4140.

09:40 D period again and we are seeing resistance at the pre emotive level 4140 that I will call the Jim dalton afternoon swing high from yesterday’s auction. Please please refer back to today’s plan and in your own trading. all the areas we have focused on in our prep have been key areas of PA in today’s auction.

KEY MARKERS AND THEIR IMPORTANCE

10:40 Buyers will want to maintain the auction above the IBHI 4117 and the volume ledge that has formed there. Possible area for a long with a clear line in the sand.

11:00 A nice PB to the VWAP 4111 and bounce but no entry for me as I can’t find confluence markers to support the trade. The mid is at 4109.5. seeing delta move higher. Maybe worth another look as we preach last week’s settle in this important area. Very unconvincing from buyers so far today, another short-covering session, thinking P profile as long as we maintain above mid.

Potential barrier, we are trading on the wrong side of today’s VPOC and this will be a barrier for ST longs to overcome.

14:00 A nice structured trade into the close. Long on the PB, scaled out for 10 points and running it as far as auction tells me to. Poor highs from yesterday look like a nice area for a flush and exit of the trade. #be aware of your key levels

VWAP again today has provided some opportunity, especially when traded against the prior day’s lows @ 4107. This was a missed opportunity in my case.

OK that’s all folks from me need to go find some balance.

Quote Of the Day

If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.-Ray Dalio

Trade Well And Prosper.

BT