Currently we are gapping up about +7.50. As overnight inventory is 100% net long, this is setting up the Goldilocks Gap play. Fade it if the early trade cannot take out the ONH. Given where the market is on the daily chart and not at any specific support for awhile, I believe there could be more lows to come and that the overnight move is one of short covering as people simply over did it yesterday which is what happens consistently in this market. Yesterday’s initial gap down was very large and sellers came out in force to accept these lower prices and take futures much lower in the RTH session. This is another reason I would be thinking that some lower prices today are imminent.
As yesterday’s value and range broke cleanly away from the prior day, our references are mostly contained to within yesterday’s range. Thus let’s be keenly aware of where VAH, VAL, and the POC are. Current overnight action is trading right at the volume POC of 2048.75. Are traders emboldened over this level? Are they more scared? We’ll see.@
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