Debrief · 2022-07-15

Debrief · 13 July 2022 · US CPI day: review only, watching 3850 for buying weakness

By The Balanced Trader2022-07-15

CPI day: a balanced ON into the release, a pre-CPI spike to 3874 that reversed, and an open auction that tested the 3759 target and left a well-auctioned low. I wasn't trading; I'd be watching the ON singles and yesterday's low at 3850 for signs of buying weakness.

US CPISpike and reverseWell-auctioned lowReview only

HIGH 3873 | LOW 3752 | CLOSE 3804.5 · 24-hour session

ES daily candle chart into 13 July 2022, with the journal's key numbers marked

The session

OvernightThe ON session was balanced into the data release, with the prior close acting as a pivot: 2-way trade. Then the pre-CPI spike and reverse. Notice the spike high, 3874, 2 points below the prior day's high (Tuesday's high, 3876.5).

The ON low, 3751, is an important reference: it traded through the 3759 NVPOC and HTF target from 5th July. This has been a major downside target.

The openOpen auction: a key test of 3759. A well-auctioned low, with buying demand and delta aggression to the upside on the open as inventory attempts to adjust. Then a higher low.

IB and mid-session3796: break above and consolidate. One touch of the prior close, where the auction rotates back lower. VWAP holds at the mid and IB high confluence.

ES 5-minute chart from Tuesday 12 July through CPI day, with my notes on the balanced ON, the pre-CPI spike and reverse, the ON low, the open auction's test of 3759 and the VWAP hold — PA review: pre-CPI spike and reverse, then the open auction's key test of 3759.

Levels into the next session

Levels marked on the PA review, above and below, and in the plan the ON singles marker and yesterday's low at 3850.

ES daily market profiles from 4 to 13 July, with the platform's reference-level labels on the right — July 13th profile review.

Above3835385038743876.5

Below379637593751

Data and news

FinancialJuice reported:

US Treasury Secretary Yellen: the price-cap plan would put downward pressure on CPI.
Traders see 175bps of BoE hikes by year-end, the first time in 3 weeks.
Euro zone money markets price in 95 bps of hikes by September, up from 84 bps on Monday.
Euro zone money markets now price in an over 50% chance of a 50 bps ECB rate hike in September.

The plan

Not trading today, so no plan. If I were, I'd be waiting for the ON singles marker and yesterday's low at 3850 for signs of buying weakness.

Key lessons

LessonNotice the detail at the extremes. The pre-CPI spike high at 3874 stopped 2 points below the prior day's high, and it reversed.

LessonKnow where the HTF targets are. The ON low traded through the 3759 NVPOC, a major downside target from 5th July; the open auction then tested 3759 and left a well-auctioned low, with buying demand and delta aggression to the upside as inventory attempted to adjust.

Quote of the day

Limit your size in any position so that fear does not become the prevailing instinct guiding your judgment.

Trade well and prosper.

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