October 31

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October 31 Pre-Bell Update

  • Last day of the month today so let’s see if there are any surprises or we continue to balance after this morning’s gap to the downside.

  • Overnight Inventory is short. We are 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.

  • We have the overnight Low right around the 5800 psychological level. It’s exactly at 5801 which is also exactly where we have last week’s low. With this excursion below Friday’s low we can confirm that Tuesday’s low was in fact a “weak low” due to the fact that it was just above Friday’s low.

  • VWAP is currently sitting at 5818 which is just 5 points below the 5823 BZ level. We have some ETH single prints between 5821 and 5823. For now, buyers need to keep us inside of last week’s range which means that they need to keep us above the Overnight Low.

  • I’m going to be monitoring the first minute range to see if sellers step in at the open. If they do, I will look to go with the gap in order to see if they can take us back to the Overnight Low area. If there isn’t much interest below the open or below the first minute range, I will be looking for a long targeting the 5823 BZ level.

October 31 Plan

Balancing between the 5852 and 5881 BZ levels continued today. The lack of interest above the 5881 BZ level sparked some selling almost towards yesterday’s’ low.

  • If we ignore the small look above yesterday’s range, today’s session would’ve ended up as another “inside day”. Either way, we could treat it as such since I will be monitoring for initiative sellers below 5852 or for initiative buyers above 5881 or for continued balance between these two levels.

Bullish Scenarios:

  • Longs above 5867 targeting 5881.

  • Longs above 5881 looking for the potential breakout but being aware that balancing could continue.

Bearish Scenarios:

  • Shorts below 5852 targeting 5823.

  • Shorts below 5823 targeting 5794.

Nasdaq:

  • Inside Day Rules



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October 30