Market conditions for today.
- 6-Day balance ( 52.64 – 50.94 ).
- Overnight inventory long ( Pivot 52.24 )
- Short term inventory slightly short.
- Previous POC was prominent.
- Open on high extreme of yesterday’s range.
At the open we traded immediately up showing some short covering from the short term inventory but we built big volume around the 52.40-52.34 area and the market just stopped there.
We traded down re-entering yesterday’s range and through the 52.24 overnight inventory pivot level putting some pressure on these overnight longs. Coupled with the fact that yesterday’s POC was prominent I was now looking for selling opportunities with yesterday’s prominent POC ( 51.90 ) as probable target.
Reasons why I was looking for sells :
- Yesterday’s prominent POC.
When we opened the “C” period there were two big volume areas 52.40-52.35 from “A” period and 52.29-52.25 from “B” period ( as shown on the image on the left ) that were possible good short entries.
We traded down to yesterday’s prominent POC in “E” period and intraday POC was prominent and migrating down. The market reversed and left a buying tail which kept me away from selling at 52.15 the POC level.
In “F” period we traded through the POC for the day confirming the buying tail and forcing day short positions to cover. Short opportunities were not part of my day strategy anymore.
“E” and “F” periods was accompanied with high volume showing strength and price acceptation. I think that it was a nice mix of short covering and new long money.
“G” period left a poor high which was also a weak high as we traded 1 tick from the 18/10 high which makes this high as unsecured.
Tomorrow will be a very interesting day as we are really close to the 7-Day balance high at 52.64 and the release of the oil inventory number.
Here I would like to bring a very important concept in day trading.
Market must take care of current business first.
At the open the current business was to get rid of weak overnight traders that were long in the 52.32 – 52.13 area. Once that long inventory was cleared market became too short and the POC from yesterday was revisited so current business now became to clean the day and short term short inventories.
Good Trading !