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For those who are new,
I use Fibonacci Sequences as the core of my analysis. I do implement both mechanical and contextual levels (from market profiles) in my analysis. I typically use mechanical levels to identify potential areas of support/distribution.
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Just a quick note
I color code just so they are easier to read and understand,
the nature of fibs means that they come with an infinite number of mechanical levels, so I will highlight significant ones.
Blue - discount zones (support levels)
Purple - zones I’m looking for price to defend, (line in the sand)
Red - premium zones (resistance / distribution zones)
News
Big print for tomorrow is Unemployment claims at 730.
This is an important print since we have the potential for rate cuts later this month
I include some of these yellow folders
sometimes when FOMC members speak, it can move the market, sometimes not, better safe than sorry
Quick Recap of Todays Session
ETH
RTH only
I have mentioned this before, but I typically do not assign too much significance to the overnight session unless I see a substantial amount of contracts traded, I just like to be aware of the positioning of London going into RTH open.
Any time we have big news prints, like NFP you can expect there to be some choppy price action in the beginning of the week. Since the market was closed on Monday dealers had some balancing to do.
We start with an opening drive up,
This was met with resistance around 6460s, which is something that I was monitoring for, if you read my post from yesterday
We retest support at 6427, which is the prior days VPOC, we consolidate in this area, and then see a rotation back up into 6460.
We did have this move out of the low at the end of the day
If you look at the 1600t chart, you will see it is very very choppy, and price is pinned in this 10pt zone.
Then when you look at the move out of the low, it just is straight up, no pull backs nothing.
I’m not sure why this happened, no one is, I just notate it as an anomaly.
There is basically no opportunity for bulls to go long in this move.
Here are the footprints —
There was some pretty heavy absorption in this 6430 area, prior to that move higher.
Most likely from dealer hedging, I will attach a figure that explains how hedging works.
Courtesy of AG Trader — you can check him out on X.
Looks like the sellers have been defending this 6474 LIS
If you look at the chart, this is a level that bulls/bears are fighting for control over
This is still my LIS as we go into tomorrow.
For me, as long as bulls are unable to break and hold above this level, I do not have alot of confidence in a move higher.
As we approach 6474 I am monitoring for seller exhaustion
This best way i’ve explained this is “returning to the scene of the crime”
When you return to the scene of the crime, you dont just walk in the door, you go in alert, just incase the killer is still around
If we are able to break and hold ABOVE 6474, I will be looking for upside targets 6485 | 6505 | 6521 | 6538 | 6566
I want to see a break and hold above 6490 to invalidate the short sequence.
In the event we run into distribution
If sellers defend 6474
Downside targets 6430 | 6417 | 6406 | 6390
In the event we see some severe selling pressure (could be caused by a bad print)
break and hold BELOW 6390
Downside targets 6364 | 6337 | 6316
» again keep in mind my levels dont really change much, I dont expect us to take out the extreme levels in one day, sometimes I dont list lower targets then we end up below my final targets, so i’ll just list an few extra
The best posts are when you add education, like you did with "How Hedging Works." Thank you for what you do, I appreciate it.
Thank you