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Peter’s Premarket Perspective | Tuesday, November 3, 2020

Peter Reznicek
Peter Reznicek
Co-founder/Head Trader, Peter's Premarket Perspective, Weekly Options advisory Email Peter Reznicek
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  Key Levels for Today
3376.25 Top of Gap
3349.75 ONH
3333.75 Bottom of Gap
3323.50 RTH High
3299.25 Settlement / ONL

 

Solid true gap higher on this election day. Gap rules are in play.

Overnight inventory is 100% net long and as of now we are slated to open in the upper third of the overnight range.

There is a large unfilled gap above yesterday’s range into which overnight activity has ventured forth. This is simply a carry forward to know that we are opening inside of a gap. Only RTH activity counts towards actually repairing this structure.

If there is any early fade, the bottom of the gap could be a support point where stronger buyers emerge. Keep that in mind as a Key Level today.

While it’s a long way away from current price, I must mention that yesterday’s RTH Low is one to carry forward into your narrative. The low was both poor and weak. It is a poor low due to lack of excess and it is a weak low because it stopped dead on the prior RTH session’s settlement. Mark it off on your charts as it will be a good short should it ever be tested again.

As this is the last RTH session before the election, expect some craziness as players jockey for position ahead of the results. Very difficult to say how futures will react this evening, so comport yourselves accordingly.

  Scenarios

    • Gap rules are in play. As such, the first scenario is always the potential fade. Overnight inventory is 100% net long and we are well out of range so the setup is there. Look for early failure to take out the ONH and/or crosses back below the open after any opening drive higher. Monitor for continuation and consider the Bottom of the Gap as potential support.
    • The upside gap should fill at some point and that could be today. If this is the scenario, then the ONH will get taken on strong tempo and bullish internals and traders should monitor for continuation.
    • Anything more playable to the downside would be presaged by a failure to hold above the Bottom of the Gap and subsequent full gap fill that then finds acceptance within yesterday’s RTH range.

     

     

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