NQ1!, From +2% to -1%. Algos Work Both Ways
An unusual day on the market. A large range swings offered multiple opportunities. One does not need to catch all of them in order to be profitable.
The overnight session was trending up and provided a hint that the buyers are active taking advantage of the oversold condition. The day session started from a strong momentum to upside slicing through multiple resistance levels. For market profile aficionados the move happened from overnight point of control to previous day point of control practically without stopping. This is not a normal action. Lack of liquidity and Algos trend following strategy create such conditions. The market become overbought pretty fast. Eventually, the market formed a balance at the top and lost it creating a short opportunity. Bad structure created from a parabolic move could not sustain a selling pressure and that led to a new low of the day.
The market remains neutral. This is an inside day. Not much to infer where it would go next. I anticipate it would continue to consolidate within a large balance. In case of the breakdown and exploring new lows watch for positive divergence. It usually restrict the move downside and traps the shorts. Watch for small balances formed and their breakouts. That creates a short term bias and small trend that could grow. Gauging momentum is helpful.
Stay nimble.
08/01/2019
The overnight session was trending up and provided a hint that the buyers are active taking advantage of the oversold condition. The day session started from a strong momentum to upside slicing through multiple resistance levels. For market profile aficionados the move happened from overnight point of control to previous day point of control practically without stopping. This is not a normal action. Lack of liquidity and Algos trend following strategy create such conditions. The market become overbought pretty fast. Eventually, the market formed a balance at the top and lost it creating a short opportunity. Bad structure created from a parabolic move could not sustain a selling pressure and that led to a new low of the day.
The market remains neutral. This is an inside day. Not much to infer where it would go next. I anticipate it would continue to consolidate within a large balance. In case of the breakdown and exploring new lows watch for positive divergence. It usually restrict the move downside and traps the shorts. Watch for small balances formed and their breakouts. That creates a short term bias and small trend that could grow. Gauging momentum is helpful.
Stay nimble.
08/01/2019
