Peter’s Premarket Perspective | Thursday, January 27, 2022

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESH22 and /NQH22 Futures are posted free every morning in the ShadowTrader Swing Trader newsletter.

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  Pre market indications
Opening In/Out Balance in balance
Overnight Inventory balanced
Current Price/Overnight Range upper third
Shock and Awe no
Potential for Early Trade no
Short Term Bias bearish, confirmed downtrend
  Key Levels for Today
4420.00 POC
4380.75 Top of Single Prints
4369.50 Bottom of Single Prints
4329.25 Settlement
4275.00 VPOC 01.24 / RTH Low 1.25

Ongoing Narrative / Commentary

Wild overnight again, but beyond the obvious should we be asking ourselves if the market is hammering out a bottom here?  I think we should.  

Yesterday’s FOMC did not deliver on the hope that there would be a more dovish stance.  It actually delivered the opposite, which was to lay out a roadmap for four to five rate hikes this year as opposed to three which were in the cards earlier.  This took markets down considerably yesterday and further overnight but neither of these actions took out the swing low of 1.24.  In fact, yesterday’s RTH Low was a higher low than the previous two sessions even though the overnight activity was notably lower.

All of which brings us to an opening gap today that is green and not red.  Have any trendlines been broken yet?The answer to that is still no, but we have to at the very least start looking at the 1.24 RTH low as a the potential low of this move.  I’m not pounding the table here, calling for that, I’m saying to consider it.  Higher lows are undeniable and if they lead to a trendline breaks, then it is prudent to reverse course.  Simple as that.  

VPOC’s

  • 01.05  4780.00
  • 01.14  4632.00
  • 01.20  4570.00
  • 01.21  4448.00
  • 01.24  4275.00

Scenarios

  • Opening well within range after a very balanced and large overnight range tell us little about how prices will trade near the open.  The better trades will present themselves later rather than earlier in the session.  
  • Current prices are within the single print section that has created yesterday’s double distribution.  AS single prints tend to act like gaps where there is a void of price action, treat this area as such and target the Top of the Single Prints on any longs.  
  • Pursuant to my commentary above, it may be prudent to favor longs today.  I am going to be watching the Settlement to see if “screens stay green” which I believe may bring in more short covering.  I believe that  bottoming in the context of a shift in monetary policy is a process and no larger commitment to the long side  should be made until downtrends start to break which they haven’t as of yet.
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Peter Reznicek

Peter Reznicek is the founder of ShadowTrader.net and writer of Peter's Premarket Perspective, a morning market profile blog to help people plan their trading day and organize their thoughts before the market opens. He can be reached at asktheshadow@shadowtrader.net.

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