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ECB’s Kazimir: I see a clear need for a 50 bps rate hike in September.
175 basis-points of Fed hikes seen by September, with at least one 75 basis-points move.
ECB depo rate is seen at 0.75% in October, implying 2 half-point hikes.
125 basis-points of ECB hikes priced by October puts two 50 basis-points hikes in play.
Iran: Nuclear deal is still possible and within reach.
Today’s Data
Yesterday’s Market Profile and Price Action Debrief
Market profile, debriefing Friday 10th June
Post CPI data and no buyers to be found into the open at 3950.57. The RTH session opened with a gigantic gap to the previous settle at 4016.
Given the large liquidation moves the from previous day and move post CPI, buyers were hoping for some relief. ON inventory was short, very short! Remember we can expect some adjustment if ON inventory is overly short. We were looking for a reaction on the open, an adjustment back towards prior value.
With all eyes on the open, a brief and tepid attempt to adjust higher failed @3959.5, and the proverbial sharks then entered the fray to finish off the kill. A straight line down to the prior month’s HVN 3900 area.
An emotional long liquidation b-profile. Some stubborn support was found at the 3900 area and remained so forming a ledge before briefly being breached to a low of 3898.75. KEY INFO* Some short covering into the weekend creating a JDAPBH of 3944 before selling off into the close. Closing very weak on the day’s lows @ 3898.75.
I will be observing the Friday lows 3898/3900 for a continuation to test the HTF (Higher time frame target) and yearly lows 3808. The Sunday open will be particularly interesting to see if BTFD traders are still interested into an increasingly hawkish FOMC and BOE next week. Should the lows break, I will be looking for a continuation down to 3876, 3854, 3832, 3809
Buyers will want to end the OTFD on a daily and will need to get over a few hurdles first at 3944 the spike base from Friday’s auction and 3959.5. Then they have the task of filling in the gap first to 4016 and then 4067 with a pitstop at 4046 along the way.
B -Profile, Liquidation, Liquidation Continuation Day
TFD DAILY & WEEKLY, STRONG IMBALANCE | MONTHLY BALANCE
H 4118.25 L 4014.75 VPOC 4090 VWAP 4079 SETTLE: 4115
MONITORING 3898 (CONTINUATION) and 3944 (START REPAIR) POOR STRUCTURE LEFT BEHIND 3944-4067
Yesterday’s Price Action Review
Watch yesterday’s CPI release filmed live. Look at the gaps early on from the release
And here are some candlesticks too. Important PA into the close, a clue.
A look at the close
A look at the close
Look at how we close super weak into a b profile following a long liquidation session.
DATA AND CORRELATIONS ON RELEASE
US Core CPI YoY Actual 6.0% (Forecast 5.9%, Previous 6.2%)
US CPI YoY Actual 8.6% (Forecast 8.3%, Previous 8.3%)
US Core CPI MoM Actual 0.6% (Forecast 0.5%, Previous 0.6%)
Correlations and market reactions
ON Update -BIG ON MOVES-
An ON gap (see important chart above) from the prior low/close and no attempt by buyers to lift from the Sunday re-open. The auction moved to slice through all major references until finding a temporary bottom at the century figure 3800. I don’t normally focus on the ON internals but in this case given the higher volume and obvious HTF participation I will.
I will be treating the ON distribution as a multi-trend auction type and each break lower will define the outer edges of smaller trading zones to will focus on.
ON inventory is SHORT! Very short and it would be interesting to see if we can get a better reaction/ readjustment off the open than we did on Friday post ECB. A failure to see a positive reaction will give sellers more confidence to dive lower.
OPEN PLAN 13.06.2022
Observing the ON Low 3798 and the LVN on today’s ON session 3823 3859 and Ultimately the ON Open and high at 3878.5. Want to see if buyers find value on the open if that is the case price should not hang around too long.
The question I am asking myself: WILL WE SEE AN ON INVENTORY ADJUSTMENT? How strong is it? If weak will likely continue lower. 3787 3750 HTF levels I am observing.
ST Time frame references
Live Journal MONDAY 13.06.2022
AND WE ARE OFF!
07.30 Open auction Out of range buyers and sellers testing either side of the ON distribution low node. 3823-3798. See chart above. I don’t see buyers rushing to load up down here… Observing 3823-3798
09.30 Finally seen the break from the 3798, notice the stepping Lower highs off the open into the beak as sellers seek liquidity.
1036 CT Stalking short at 3786 VWAp and session MID. Taken ac couple of losses trying to get short already on the small size.
1039 Taking a scale-out around 68 was not a bad idea if you jumped on that short at VWAP. 20points to take some risk off. Auction is starting to rotate so you want be finding the edges of small balance areas to focus your order entries.
What gave me some confidence in the trade was a confluence with the mID and my prepped levels@3786. Seeing volume increasing into VWAP is a good sign too.
Volume increases on the way up to VWAP at the MID and cHVN
1230 CT Update Recognise balance and Trade balance Top clues from the day that the balance playbook was in play.
Early auction dominated by short continuation halts at key reference point illustrated in the ON prep 3850 area.
Buyers squeeze late shorts all the way up the open auction area BUT fail to get above the opening high. Sellers then push back to the IB LOW BUT not below (50lots trade 0.25 points below the IB)
A reversal back up the day’s range slicing through the MID to test the other side of the range.
TOP TIP: Once you have seen us test both sides of a range and the MID no longer holding we likely are in balance. Trade Balance RULES
Check out the VWAP guide also for a reminder when not to trade.
How To Trade VWAP
PLEASE WATCH THE PRE OPEN YOUTUBE: Where I explain how I merge prior monthly profiles to find my references for today’s session. IMPORTANT STUFF Also review the weekly analysis. You will need it every day!
Quote Of the Day
“We don’t care about ‘why’. Real traders only have the time and interest to care about ‘what’ and ‘when’ and ‘if’ and ‘then’. ‘Why’ is for pretenders.”-JC Parets.
Trade Well And Prosper.
BT
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