Debrief · 29 June 2022 · A normal distribution, then an ON trend into month end
Sellers drove to the edge of balance at the 3805 gap and stopped there, and the tennis match between 3801 and 3840 printed a textbook normal distribution, with mid, VWAP, settle and VPOC all at 3820. Overnight a large order imbalance trended down into the HTF HVN, and Thursday's month-end plan was built on gap rules.
H 3840 | L 3801 | MID 3820 | VWAP 3820 | SETTLE 3820 | VPOC 3820
The session
OvernightThe ON had barely traded up above Tuesday's lower distribution high at 3843, leaving the impression of weak demand into the open.
The openYesterday's RTH session opened inside Tuesday's liquidation range, not far off the Tuesday low at 3823. A lack of initial buying interest on the open at 3830, and a failed attempt to trade above the ON high at 3840, allowed sellers to test Tuesday's lows and then attempt to close the well-identified gap from 24/6 at 3805. The drive lower was compelling, but traders had to be AWARE of the importance of the gap high at 3805 and the spike bases.
We trade from one area of balance to the next. We look for resistance and support at the outer edges! 3805 was the edge of balance!
Mid-session and closeAfter the open, a low at 3801, just below the gap highs from the 24/6 auction, and the high at 3840 set up an impressive tennis match around the mid, resulting in one of the most beautiful full-session Gaussian profiles. I won't be writing this a lot: A NORMAL DISTRIBUTION! Mid, VWAP, settle and VPOC all at 3820. Amazing!
Observing the nodes left from the trend lower that created a multi-distribution: the gap is now filled to 3805.
Day typeNormal day, daily OTFD.
ON sessionImbalance. Into the ON, the likelihood of a move above or below Wednesday's session high or low was high, given the probability of stops on either side of the bracket and acceptance area. ON, we had a significant order imbalance to the downside through Wednesday's lows, trending into the weekly, monthly and quarterly HVN area at 3765. Support is found at these lows. Important: 3760.75. Post the PCE data, that HVN is really important!
ON trend day, multi-distribution, daily OTFD. ON H 3825 | ON L 3760.75 | MID 3793 | lower distribution high 3789.
Levels into the next session
Monitoring from the RTH session: 3801 yLo, 3820 mid, 3779 NVPOC and 3760 ON lows, and Tuesday's 3843, 3875 and 3920 distribution nodes. From the ON session: 3760 ON low, 3789 LVN, yLow 3801/3805 and 3820. The rest are marked on the profile chart, above and below.
Data and news
FinancialJuice reported:
- Riksbank's Governor Ingves: if necessary at some point, we will hike by 75 basis points.
- France's Finance Minister Le Maire: the EU will adopt the global minimum corporate tax reform in the coming months, with or without Hungary's backing.
- ECB's Enria: the gradual increase in interest rates is beneficial for banks on the whole.
JPM JHEQXAndy Constan (@dampedspring) on Twitter, June 30, 2022: here is what is happening at JPM. At some point today the roll will happen. The new trade will be delta neutral for the dealers because it will include a deep ITM June 30th call they sell. In addition, the dealers will be short a deep in-the-money put which they...
The plan
Trade planON H 3825 | ON L 3760.75 | ON mid 3793 | yLow 3801/3805 | 3820. Expected to open out of range, out of balance: GAP RULES!
- A) ON inventory short: a readjustment into the open, or on the open, looking to test the upper distribution high at 3789. On a weak test and resistance, look to take a short position to target the ON low, 3760.
- B) A stronger push on the open, to trade back to yesterday's low, the 3801/3805 area. On a weak test there, trade back to the ON low.
- C) Gap and go: an impulse from the open to break the ON low. Watch for support here: 3760 will be tricky, an HTF HVN! MONTH END!
Opening bell0830CT: I spent the morning talking about 3786 in my new video on YouTube. For a number of reasons this number was significant, and an area to reference following the ON sessions post CPI. Why was this area important? Despite positive news on Ukraine, the PCE data and yields falling, ES supply was suppressing the price. Each attempt to drive the price above the ON HVN failed, and early bidders on the RTH open met the same fate as earlier: REJECTION. An open test drive opening.
Given that ON inventory was short, the pull-back through the opening price encouraged a swift auction to the ON low at 3760, before a brief consolidation and then a test above the LVN on the HTF composite profile to a day low at 3741.
Buyers then drove the auction higher in choppy fashion, breaking through the IB and meeting strong resistance at the obvious references, 3800 and 3805, before finally sprinting up to test the POC from yesterday's auction.
Key tweets
JHEQX update Here is what is happening at JPM. At some point today the roll will happen. The new trade will be delta neutral for the dealers because it will include a deep ITM June 30th call they sell. In addition the dealers will be short a deep in the money put which they
Read on X →Key lessons
Quote of the day
We should reward people, not ridicule them, for thinking the impossible.
Trade well and prosper.
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