OPEN at 3884.24
Overnight trading was mostly short.
We are opening in range and in value from Friday. The opening range (first 1 minute candle) was too large for my risk appetite, with a range of 7.75 points.
The IB is very small, A period high is at 3894.75 and B period low at 3872.25, making this only a 22.5 point range. Price has been circling through the OPEN price multiple times, indicating low directional conviction. POC is at 3885.50 as of 8:50. Most likely we are in a holding pattern in anticipation of the FOMC meeting which starts tomorrow and will hold its press conference on Wednesday, after the close. So far, there have been three range extensions to the updside, one in D (8 am) period and one in E (8:30 am) period and one to the downside in B. E was an excess high at 3904.50. Range extensions on a range bound day are not as indicative of a trend than they are during a day with more directional conviction.
First trade at the .618 retracement, going long. We already had two range extensions to the upside. Stop loss is set at 3883.75 just 3 ticks below 3884.50 (which is also one tick above open _yellow and purple lane) and trade was entered long at the 9:09 candle.
The footprint chart shows how strong the two big candles are at 8:57 and 8:58. Even when the trade was entered at 9:09 there were no stacked imbalances on the bid. Regardless, the price went up to the 3900 and stalled at that level for 3 candles precisely. At that point I lifted the stop loss to 3897.50 at which point I got stopped out of the trade. 3897.5-3884.50=13 points. That is pretty good for a day that overall had only a range of 32.25 points.
Also note that 3900 is the level where buying dried up. It is also the base of a stacked imbalance, indicating strong seller presence.
At the end of the day the range was extended only minimally and my earlier assumption that this would be a small range bound day with low directional conviction became true. The TPO is fairly wide (squat) with 13. The POC is 3887.50 and higher than Friday. We have an excess high with 3904.50 formed in E period at 8:30. Value range is small and contained inside Friday’s value area. Fibonacci’s retracements were of little help today because price would oftentimes go above the .618 retracement before coming back. Price also came back to open price until the end of the session, cementing my assumption that the market is waiting for new information. The direction of a breakout from this balance position now should follow the direction of the short term trend.
An anomaly worth mentioning is the exacting low in G and H period, which came down to 3877.75 and 3877.50. This is usually a sign of weaker hands. That level will most likely be revisited. Range extensions on a range bound day are not as indicative of a trend than they are during a day with more directional conviction.
Nontrend Day (Dalton)
Dynamics A Nontrend day is characterized by a complete lack of
directional conviction. Nontrend days often occur before the release of a
big economic number, news event or a holiday. Market participants
balance their positions in expectation of the market’s reaction to the external stimuli—there is simply no activity. Trade is not being facilitated
in any direction, for there is little market participation and no confidence.
Structural Characteristics A Nontrend day starts out looking as if it
might be a trend day, for the initial range is narrow. However, the other
timeframe never surfaces and there is no range extension
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