Tail End of Febuary
greetings,
last night globex
Wide-ranged movements from the overnight session as Ukraine & Russia headlines continue to keep market participants on their toes. From 4330s to 4392, price & tape characteristics were absorbing the headlines with subtle but stronger strength as time progressed (“pricing in”).
Front run? Actual buying? Short covering? Exit Liquidity? All of the above?
For that time instance, the tape read bullish which ushered a move from 4320 to 4392 w/ 4360 as a retest.
The market moves in 2 stages.
1) Balanced
2) Price discovery
Balanced action is where there is an agreement between buyers and sellers & prices trade back and forth in a sideways motion.
Price discovery action is when there is a disagreement between buyers and sellers, thus prices will move out of balance and become imbalanced.
Elevated volume from globex last night implied the market is not in a balanced state as the average globex volume is 60k +/- 10k standard deviation & the night printed 300k+ total, 100k+ before the big move lower.
These types of clues serve to be aware of potential increases of upcoming volatile scenarios.
Frankfurt & London open to show more clues.
Around/During London open, prices began to fall quickly.
Tape had changed, wasn’t sure the headline that initiated this characteristic change but from here 4392 marked the high and prices traded +100 handles lower.
Since today is President’s day, equity markets are closed until tomorrow & RTH printed only 424k contracts as sized players are not around.
Market’s theme has been headline dominant which makes it a bit trickier to trade but that is why where the importance of understanding the context, levels & order flow helps with navigation.
Let’s move onto the charts.
.technical difficulties w/ image quality, 200% zoom temporary solution.
The diagram above is a representation of the ranges of where prices are likely to be bracketed for the time being.
This part of the section is understanding the context & price extensions for execution preparation so when a confluence across multiple factors arises, execution becomes more fluid.
Prices at this time are bracketed within 4285-4465 with a 4376 midpoint (MP) & the 4285 range-low coincides with the wicked area around 4260, where long stops are sitting.
I think this 4260-4285 zone will serve as a good pivot in the medium term.