Debrief · 30 June 2022 · Month end: a true gap, a choppy neutral day and a buying tail
Month end opened with a true gap below strong resistance, broke the ON lows to 3741, then chopped back up to the prior VPOC before a double top released into the settle. Buyers left a small tail to defend and defended it overnight; the trade plan is shorts into yesterday's lows, and no long ideas.
H 3822.75 | L 3741.25 | MID 3782 | VWAP 3783 | SETTLE 3789 | VPOC 3789
The session
OvernightThe ON auction into month-end was heavy, breaking below Wednesday's very condensed normal distribution day. Sellers were found below the Wednesday POC and pushed lower in the session to test the sizeable composite level at 3760, before bouncing slightly into the RTH handover at 3778.
The openA true gap to the prior low (GAP RULES!), opening at 3778, just below an area of strong resistance from the ON session (3786, and the ON singles marker at 3789).
The auction opened with an open test rejection, briefly impulsing up to test 3786, an important area from the ON session, before a solid push lower to test and break the ON lows at 3760, and on to 3741. There demand was found: buyers reversed the auction higher, breaking back through the IB en route to test the previous day's VPOC at 3820 and briefly trading as high as 3822.75. The drive higher was by no means easy and very choppy; being month end, high volume was to be expected.
Into the closeA second failure to take higher ground above 3822 left a double-top structure that was eventually released into the settlement at 3789, as weaker longs liquidated back down. The auction continues to OTFD. Notably, we closed with a small buying tail, with a spike base of 3746 and a low of 3741.25. Buyers will be looking to defend this area.
Yesterday's PA was quite choppy. Jim Dalton afternoon pull-back high at 3803!! Near the 3800 ledge area.
Day typeNeutral day, daily OTFD. The auction is currently inside the 21-23 June balance.
Month endAs it's month end and the first of the month, it's worth noting all the critical profile levels for the prior month. I will be focusing on these areas for the first few days of the new month's auction to gauge for change. Surprisingly, they have barely changed since my weekly analysis, so I'll be lazy and not update them just yet. Looking at the HTF, 3672 remains a key target below June's monthly POC at 3780. To improve, you should note the HTF auction. I can't stress this enough.
Levels into the next session
Monitoring:
- 3741-46 (yesterday's low and the spike base)
- 3800 (ledge)
- 3820
- Tuesday's 3843, 3875 and 3920 distribution nodes: I'm observing the nodes left from Tuesday's trend lower, which created a multi-distribution.
- HTF: 3672, the key target below June's monthly POC at 3780
The rest are marked on the profile, above and below.
Data and news
FinancialJuice reported:
- The UK government plans to reduce VAT to ease the pain of price increases (The Times).
- Japan's FSA will loosen regulations to let trust banks manage crypto.
- US Treasury Secretary Yellen emphasised the necessity for stablecoins to be governed by federal law.
- Japan's Deputy Chief Cabinet Secretary Kihara: investigating the effects of Putin's Sakhalin-2 order on Japan.
- Eurozone CPI MoM flash: actual 0.8% (forecast 0.7%, previous 0.8%).
- France S&P Global June final manufacturing PMI at 51.4 (vs flash 51.0).
- German engineering orders were down 1% in the March-May period.
The plan
ON sessionDouble distribution. An ON test and fail of the volume ledge at 3794 drew in sellers, who took the auction lower through yesterday's range to test the spike base, forming a low at 3744.5. Buyers defended these lows (take note) and auctioned all the way back to yesterday's POC before rotating back down as of 6 am CT.
ON double distribution, inside yesterday's range. Expect a choppy open inside range, given the two-way rotations ON.
ON H 3794 | ON L 3744 | ON POC 3782. Monitoring the ON high at 3794.
Trade planMonitoring 3741/46 (yesterday's low and the spike base), yesterday's settle at 3789, the ON high at 3794 and the 3800 ledge, and 3820. Expected to open inside range: expect chop. Be patient.
A) Looking to take shorts into yesterday's lows to test 3712. I will observe yesterday's settlement and the ON high on the open for weakness. 3803 is my last stand on this trade idea, and the Jim Dalton afternoon PB high.
No long ideas: I have no conviction about the upside today. Above 3820 we may find a steady bid to repair poor structure from the Tuesday auction.
Notable tweetOn average, yes, but look at these numbers during a bear cycle. July is historically a great month, and so is the 4th July trade, but maybe we still need to keep an open mind and trade the auction. I have to say I was surprised when I filtered for bear cycles.
Key tweets
@AdamMancini4 On average but look at these numbers during a bear cycle firstofthemonth July is historically a great month and so is the 4th July trade but maybe we need to still keep an open mind and trade the auction:) I have to say I was surprised when I filtered for bear cycles
View on X →Key lessons
Quote of the day
Legend: everyone laughs at his calls, but he's the one really laughing. Nonetheless, well said, Jim!
Trade well and prosper.
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