Debrief · 28 June 2022 · Open drive trapped at the ON high, then liquidation

OvernightTuesday's ON was neutral and balanced. It penetrated both Monday's high and low, if only briefly, and handed over into the RTH 15 points above Monday's close. ON inventory was slightly long, and as always when an opening gap to the close presents itself, the opening statement from participants is a crucial clue for the session.

The openBuyers' opening statement on Tuesday was bold: an OPEN DRIVE straight up from 3920 to a high at 3950, but...

For anyone who had legitimately chased the strong impulse up, there was an equally important message from sellers, who stood waiting resolutely at Monday's ON session high, 3948, soaking up demand and trapping longs (the high was 3950.25).

The reversalThe reversal was slow and steady, trickling lower back to the opening price of 3920.25. With sellers having reversed the buyers' bold opening statement, the auction briefly held at the opening price. Buyers, now confused, held up against supply before eventually succumbing, and trapped longs began to liquidate.

First we went through Monday's VPOC at 3905 and held underneath it (key clue), then sliced through Monday's lows at 3892.5 before the trend was set lower. (Key clue: visual references sliced through.)

Traders had to be ready, and yesterday's tweet into the open was key: it recognised the composite balance that had accumulated the potential for a liquidation. Buyers had dramatically failed to break Monday's ON high, a weak reference.

Another critical clue was delta moving aggressively lower throughout the session, following the opening 5-minute spike.

The close3825 was where the auction came to settle. This was not a prominent spot, but it was highlighted in yesterday's notes: it was the gap mid. This will be a crucial battleground for today. The auction into the close seemed unfinished, despite many calling the lows in what is still a bear market.

I'm observing the nodes left from yesterday's trend lower, which created a multi-distribution, and the gap to 3805.

Sometimes the market needs to break higher to go lower, and vice versa. (Jim Dalton)

Day typeTrend day, multi-distribution, daily OTFD. H 3950, L 3823, mid 3886, VWAP 3870, settle 3825.

Pre-open tweetWatch that balance that had developed, especially the lows. From Twitter: here is today's journal. I need to rush off and won't be back until well after the close, if at all. On the update, just watch the ON low AND yesterday's lows. My tip merges the last two days' profiles. Sorry I can't help more.

Monitoring: 3823, yesterday's low; 3886, the mid; 3805, the gap; 3843, 3875 and 3920, the distribution nodes; and 3780, the composite NVPOC. The rest are marked on the profile review, above and below.