Debrief · 19 August 2022 · OPEX Friday: profile and price-action review
OPEX Friday: after 4 days of balance, a gap open with no buying initiative opened the floodgates to a long liquidation and a B profile, and the daily auction is now OTFD. Here is the debrief from my charts, the weekly profile overview and the levels into Sunday's re-open.
HIGH 4288 | LOW 4220.75 | CLOSE 4231.5 · 24-hour session
The session
The weekFriday's selling imbalance followed 4 days of balance: Tuesday's spike extreme, a lower low on Wednesday, and an inside day Thursday. Buyers had gotten overly excited and were now trapped.
Into the openA buying imbalance. Past the hour, delta starts moving higher; buying becomes more obvious as bids are lifted, and price moves higher.
The openFocus on this open. Delta turns negative: buyers were unable to close the gap to the prior day's lows, and selling becomes aggressive. The lack of buying initiative on Friday's gap open opened the floodgates to an impulsive long-liquidation move: a strong selling imbalance, then another selling imbalance, resulting in an obvious B-profile.
Day typeOPEX. Friday's selling imbalance and a long-liquidation B profile. The daily auction is now OTFD.
The weekly profileWeekly profile overview: a balance week, then a break out of balance and a price-discovery week. This week the weekly profile is OTFU, but closes near the lows. A build-up of inventory inside balance gives fuel for bigger moves, and we are exiting 4 days of balance.
Levels into the next session
Levels marked on the profile review, above and below. The prior balance high is 4327.5 and the prior balance low 4255.
Data and news
FinancialJuice reported:
- Japan's Jera and Tokyo Gas have renewed their contracts to buy LNG from Russia's Sakhalin-2 project under its new operator: Nikkei.
- Gazprom will suspend gas flows via Nord Stream from August 31st to September 2nd for maintenance. European gas closes at a record high.
- Fed's Barkin: there is still a lot of time before deciding on the extent of the September rate increase.
- China's President Xi is considering a trip to Central Asia: WSJ.
- China's President Xi considers a potential meeting with Russia's Putin next month: WSJ.
The plan
Into Sunday's re-openThe daily auction is now OTFD. Sellers will want to maintain the momentum and set the tone early to break the weekly lows at 4221; this should open up further downside targets.
The afternoon PB high at 4245, along with the prior balance lows at 4255, will be key targets for buyers to regain control of the auction. Sunday's re-open to set the tone?
Key lessons
Quote of the day
I learned that if you work hard and creatively, you can have just about anything you want, but not everything you want. Maturity is the ability to reject good alternatives in order to pursue even better ones.
It is far more common for people to allow ego to stand in the way of learning.
Trade well and prosper.
Get the journal in your inbox
The daily journal, the week reviews and the Weekly Ahead, by email. Subscribers get the pre-market update first.