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Peter’s Premarket Perspective | Tuesday, September 1st, 2020

Peter Reznicek
Peter Reznicek
Co-founder/Head Trader, Peter's Premarket Perspective, Weekly Options advisory Email Peter Reznicek
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The Market Profile value areas and ShadowTrader Pivots for /ESU20 and /NQU20 Futures are posted free every morning

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  Key Levels for Today
3524.50 ONH (8.30) / Futures ATH
3516.25 ONH
3513.00 RTH High
3490.00 RTH Low (Poor)
3484.25 ONL

 

The list of VPOC’s and unfilled gaps below us from the March lows.

VPOC 17 (8.25) – 3430.50
VPOC 16 (8/24) Prominent – 3416.50
Top of Gap 3 – 3409.50
Bottom of Gap 3 – 3396.25
VPOC 15(8.21) – 3385.00
VPOC 14 (8.6) – 3315.75
Top of Gap 2 – 3310.50
Bottom of Gap 2 – 3300.50
VPOC 13 (8.4) – 3292.25
Top of Gap 1 – 3276.50
Bottom of Gap 1 – 3267.00
VPOC 12 (7.31) – 3227.00
VPOC 11 (7.14) – 3163.25
VPOC 10 (7.1) – 3104.25
VPOC 9 (6.30) – 3064.00
VPOC 8 (6.29) – 3028.75
VPOC 7 (5.22) – 2935.75
VPOC 6 (5.18) – 2843.00
VPOC 5 (4.22) – 2730.00
VPOC 4 (4.7) – 2620.00
VPOC 3 (3.30) – 2531.00
VPOC 2 (3.26) – 2478.00
VPOC 1 (3.24) – 2231.00

I thought the bananas were appropriate for this issue’s image because that’s pretty much how the market is acting lately, bananas. Yesterday’s RTH session was very wild and made very little sense from a a technical perspective. The divergence was huge with NDX tacking on almost a full percentage point at the close while SPX lost almost a quarter point.

To a degree, the wild divergence continues today with the /NQ’s up over 4x what the /ES is currently trading.

Liquidation breaks and sharp short covering rallies seem to be the M.O. lately so comport yourselves accordingly. Responsive trade may be bigger than you will imagine. Use that to your benefit.

This overnight session has us trading on a small gap higher but not a true gap. Gap rules are not in play and the easier (read: higher odds) trade will probably develop later rather than earlier in today’s session. Overnight inventory is balanced to slightly net long. Interestingly enough, there is overnight activity above both extremes of the RTH session. That only points to massive indecision to me and confirms further that the market will need some time today to show its hand.

I continue to carry forward the overnight high from 8.30 which is still the high of this move. As far as RTH sessions are concerned, there was some proper excess to yesterday’s auction. I carry that forward as well.

Yesterday’s low was poor and is in need of repair.

While everyone’s focus is on what the Nasdaq 100 is doing, don’t be distracted from the fact that the SPX is clearly struggling. Structures have not supported the advance and value isn’t really moving. Too many people getting long and not getting paid for it can only end in one way.

  Scenarios

    • The very large overnight range that engulfs the RTH range and is currently trading within balance gives little clue as to how futures will react in early trade. The better trade should develop earlier rather than later. Recently, I’ve discussed ruling reason. The current ruling reason is that Nasdaq stocks are in a bubble and are pulling everything along with it. That, and the fact that the /ES is going along very stubbornly are both huge pieces of M.G.I. to keep in mind as you navigate the session.

 

 

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