Daily Plan v2146.4

11/11/21

Traders:

Lots of great action in indices on both sides! Let us see what worked and what did not work today from yesterday’s trade plan:

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A) Recap:

1) Primary hypothesis was for yesterday’s Value Area High (VAH) 4680 to act as the resistance today, if we opened below 4680 AND try to take out the prior day’s lows at 4660.

2) We opened at 4660. At prior day’s lows. Based on overnight orderflow I expected a test of 4680 . See here: Tic Toc AM Update

3) 4680 provided good resistance in the night and in the RTH session we got up to 4679 and stalled.

4) This was followed by ~ 20 points of sell activity. There was a small fight offered at prior day’s lows around 4660 for a small 5 point bounce but then the sellers overwhelmed the buyers and as of this publication, S&P500 emini is trading at 4648. Down solid 30+ handles from 4680.

5) Attached the Trade Plan from yesterday for those who have not yet reviewed it: 11/10 Trade Plan

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B) Contextual Market Information:

1) Today’s action proved my hypothesis from yesterday that the volume build up around 4660-4670 was bearish. This has been validated and could play a part in tomorrow’s trade.

2) Price is now close to navigating 4630 handles . This is where a LOT of repair activity has to happen post FOMC last week. A lot of GAPS here to be filled.

3) Overhead resistance right above us at 4660.

4) Selling so far has been quite “silent” meaning well absorbed . Did not see a lot of market orders hitting the BIDS, so I am assuming a lot of action has been caused by absorption on the offer side rather than aggressor orders.

Let us leverage this information to build some price scenarios:

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C) Tomorrow:

1) Any repair or GAP fill here should be completed ASAP IMO. For prices to go higher, I expect not a whole lot of volume formation here at the lows between now and tonight.

2) Also, remember a lot of folks have gone long in the first week of November , expecting a year end rally. They are late comers and will not have a lot of patience if we start chipping away at levels listed below.

With this backdrop I have 2 following scenarios:

3) Scenario A: For Bullish case, I expect an OPEN above 4660 or BIDS above 4660 early on in the RTH session. If this is what happens, I think we may test 4680 followed by 4692 shortly thereafter.

4) Scenario B: An OPEN below 4660 invalidates the dip buying at least in short term. We may start chipping away at 4622 followed by 4608 below it. I think the farther we open below 4660, more bearish the tape may be due to the contextual background outlined above.

Hope this makes sense. Let me know what y’all think. Given the current softness in the general market, I am still not seeing a lot of great tickers to get on. Waiting for S&P 500 to firm up. Any tickers I like will be sent in a separate email.

~ Tic Toc 🍀

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