Apr 202010

The market structure is a little tricky this morning. There is also no news until Uncle Ben at 11 who is giving Lehman testimony, but of course we already have the transcript and I doubt the language will do much if anything. Volume to the long side yesterday was quite heavy and overnight was significant as well with the institutional trading leading the up side biased trading. The only thing I’m relatively sure of though is that the 94 handle is probably interim support and is likely to hold. I have high hopes for 98.75 holding as well, but we will have to watch order flow especially carefully there as the market may just want to grind and fill in the cave of no trading between there and 97 for a while today. We shall see. It also may be tested pre-market which will change the picture. We will only fade the first test of 98.75 in any case. I wish I could buy the open on strong momentum above 1200, but I fear that the 1.50 level may choke a bit so there isn’t enough meat on that bone probability-wise. That said, I may or may not fade 1.50 depending on order flow and sentiment. It could easily get run over. Still, 1.5 is a stronger multi-day level than the OH at 1203 and if we get there it is likely to break as it sits right in the middle of a comfortable balance area from last week. If we do rally to 1203 I don’t handicap it very high to hold, and I might get long at around 4 and trade into 5 or even 6. Volatility should be good though so I would likely scalp it for a tick or two at least on the virgin retest. On the short side other than what I said of 94 holding, I might sell under the 98.75 level if it fails and trade into 97.25 or 96.50. If for some reason 94 breaks I’ll wait to short around 93.25 and trade down to 91 or 90.50 and then fade 89 for sure if we get there. Again, this market structure is VERY tricky and VERY uncertain, so BE CAREFUL this morning and watch order flow carefully. I can just smell death in the air today…

 Posted by at 9:03 am

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