Trend Day

10/13/2022

https://www.tradingview.com/x/oavnhN2a/

Extremely interesting trading trend day, one timeframe. The final structure at close looks like P which is indicative of short covering.
Earyly trading:
The release of CPI number and jobless claims led to a deep dive of 117 points at 5:30 sharp. It was probabbly imposssible to trade this move unless you get in before. The opneing range was too large with 9 points (first 1 min candle). The price circled back and forth through the opening price up until about 6:46 when it left the area and never looked back. Since we were out of value and out of range, this would have been a good trade location as a reversion to mean (yesteday’s POC or value area would have been very likely. This became even more likely since the drop at 5:30 already created a gap with a gap high at 3585 (yesterday’s range low.) Open price was 3513.25.
The IB (3562.25-3502.00): 60 points did not close the gap yet but saw some upward momentum. Further range extensions followed. The price went up further and passed all benchmarks from this week, even not to take a breath at yesterday’s POC 3603. Today’s POC and VPC were close and established in the area of the POC from last Friday 10/7 at 3670. The high of the session was at 3697.75 which is still under last Friday’s high which was a single tail that showed strong seller activity.
The fact that the formation of the TPO is a P and the fact that prices are still under last Friday’s high and merely recovered this week’s looses indicated a short covering rally. The bottom might not be in yet.