P shaped trend day

The purple line in the middle is the halfback line from Friday’s very intense rally to the downside. Meaning on Monday morning we already made halfway back of the losses from Friday. The opening range did not offer a trade with a range of over 9 points. Should have found an entry during the overnight before.

Whole day:

Monday opened out of range and out of value. Together with this the overnight longs this was a strong start to the day with no retest to the downside. I found my entry at a 50% retracement and was able to manage a nice trade. 3702.50 was the high of the session and there was only one range extension. The range was extremely narrow, the IB was the range for the whole day. Low was 3661.50 and high was 3702.50, the range was only 41 points for the day! D period at 8 am went down to 3668.25 which was more than 66% retracement which changed my point of view in regard to this being a trend day. At this point this could have been more of a rangebound day. In the end price circled back up and created a weak high at 3702.25 in J period (11 am). That area will be revisited at some point in the future. The POC which is the fairest value where most of the trading took place today is very wide with 12 TPO blocks: 3686.25 is an area to watch in the future.

At the beginning of the trading day we said that repair will be happening within the two single print TPOs from either Thursday’s low of 3502 or towards the excess high from Friday at the 3725.25 level. Due to the strong overnight activity this exactly what happened. Today’s open out of range that was not questioned throughout the day led the way into repair happening beyond the Halfback level left behind by Friday’s down rally. Overall, due to the P shape (short covering) of the TPO chart we are not going to see much further activity to the upside, maybe a retest of Thursday’s high and then a balance day? More information is expected with S&P Large Caps publishing earning on Wednesday (Tesla) and tomorrow Tuesday. If results surprise to the upside we may see a continuation to the upside. Not that after such a narrow range, the next trading day made a big move.