October 29

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October 29 Pre-Bell Update

• Overnight Inventory is short. We are currently trading below/outside yesterday’s range which means that gap rules apply. The rule tells us to “go with the gap” if it doesn’t get filled. A sign of stronger sellers is preventing the gap from getting filled.

• By opening here we are also seeing an attempt at the “inside day breakout”.

• I’m going to be monitoring the overnight low and the open to see if sellers come in strong or to see if we get a correction to overnight inventory. Either way, WAP is currently sitting at 5858 which adds confluence to yesterday’s low/gap fill. Stronger sellers should prevent the gap from getting filled, I will be monitoring for sellers below VWAP in the case that we get a correction to Overnight Inventory.

• In the case that the gap gets filled and we see support above yesterday’s low I will be looking for the “inside day breakout failure”.

October 29 Plan

Today’s session ended up as an “inside day”. Whenever we have an “inside day”, the rule tells us to “go with the gap” above or below either extreme.

• Notice that today’s session took place mostly between the 5881 BZ level which was also Friday’s Value Area High and the bottom of Friday’s single prints at 5860.25.

Bullish Scenarios:

• Longs above 5870 or above 5881 targeting 5900 followed by 5940.

Bearish Scenarios:

• Shorts below 5860 or below 5852 targeting 5823.

Nasdaq:

• Inside Day Rules.