The Market Brief
U.S. futures are near flat after a hectic week, during which the Federal Reserve’s initial move in what could be a string of swift rate cuts helped push markets to new highs.
Macro Viewpoint
A more accommodative policy is providing a boost to equity bulls just as high valuations collide with typically weak seasonal patterns.
After a strong rally, investors are finding reasons to keep equities on the rise, supported by solid earnings reports and an economy that continues to show resilience.
Friday’s $5 trillion quarterly triple-witching options expiration is expected to stir volatility, with market attention quickly shifting toward the upcoming nonfarm payrolls data.
🔄 Prior Session Re-cap
The video below is the start of U.S. replay, along with some context. The references of Flip zone and Pivot were given to our Subscribers at around 5:00 A.M. ET during the overnight session, before the fact and before any of the candlesticks you see could have existed.
By using just 2 well-placed pivots and monitoring for continuation or the lack thereof, we identify a “failed breakout” and lack of acceptance above Flip zone, which was a great short opportunity with destination to book profit at the exact tick, our pivot of 6670.
Right after 6670 was hit, we can identify the strong buying stepping in as seen on the video, and our profit target then becomes the same exact area as we see a wall of sell limit orders come in around Flip zone. Volume becomes “thin” (look at volume profile) on the way up, an indicator of lack of interest for continuation above pivot.
Regardless of whatever momentum trading strategy you use, understanding the market environment and price action is going to significantly improve your risk management.
Market profiling and order flow are not by themselves trading strategies. They help us identify opportunities and offer insights that you would not be able to see by looking at a candlestick alone.
This enables us to make better-informed decisions and add context to a move, identifying areas where aggression was initiated by institutional traders and building a framework of scenarios that will have higher probabilities for execution.
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