Very difficult market to trade today.
Market conditions at Open :
- Overnight inventory was neutral.
- Short term inventory was slightly long.
- 5-Day balance
- Opening right at Friday’s high
After the open we traded down slightly ( 6 ticks ) before trading back up through the open. We saw some short covering confirmed by P formation on the volume profile from the VTI template. “A” period range was quite high ( 41 ticks ) increasing somewhat the odds that the market could be rotating.
We did not see continuation as the market traded up and down showing 4 TPOs across at the intraday POC in “D” period confirming the rotational nature of the market. I defined my trading range as 52.30 and 51.74 which was the overnight range.
In “F” period we created a new low and lowered the POC so my trading range was adjusted to 52.04 51.74.
“F” and “G” offered good buying opportunities as the intraday POC was prominent and value was clearly developing higher.
“H” traded up to the day POC and offered the opportunity to go with the POC migration and the high of my trading range.
That was a very difficult day and ask for a good understanding of market structure.
At the open we have no structure yet so we must rely on inventories but as the day goes by we must consider the developing value, POC – its prominency as well as its migration -, volume, weak hands activity etc ..
Good Trading !