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Peter’s Premarket Perspective | Thursday, March 18, 2021

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 /ESM21 and /NQM21 Futures are posted free every morning

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  Key Levels for Today
3978.50 ATH (Overnight Session)
3949.225 Halfback
3932.50 ONL / POC
3925.00 RTH Low

 

Large gap down back into range after the FOMC rally yesterday. To say that this current market is a difficult one to trade would be an understatement. Essentially you have a lot of bullish underpinnings against one headwind of rising rates. The ten year yield gapped up again to well over 1.7 this morning.

As we are opening within yesterday’s expanded range, gap rules are not in play. Overnight inventory is surprisingly balanced for a gap down of this size and we are currently ticking in the lower third of the overnight range. Higher odds trade should develop later in the session.

When the market is continually showing a clear lack of confidence, it’s important not to let yourself get whipped around. Cash is a position. Trade smaller or not at all if things are not clear. Shorten your timeframe if you can as there are plenty of responsive intraday opportunities even while swing setups are proving more difficult.

  Scenarios

    • The lack of follow through on moves and the constant sensitivity to rates (although seemingly more on the /NQ side) makes trading at this time difficult. A lot of basic T/A and market profile theory simply fails to work. Understand that markets go through periods like this and our job is to simply not lose our shirts while we wait for more amenable conditions.
    • As the RTH range was relatively extended, I’ve marked off Halfback as a Key Level. While it can be a potential inflection point, use it more as a gauge of sentiment.
    • Should further weakness come into the market, there was a lack of material excess low from 3.12 that could be repaired.

 

 

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