S&P 500 Futures Daily Insights for Thu 17 Nov 2022
Trapped short positions at the day's lows ahead of yet another day of key data releases
GDR Model Insights for the Current Week
GDR Model Performance (2022): +22.21%
Market Tone: Potential Transition to Bullish (previous week: Bearish)
Positioning: 0.00% Flat (previous day: 0.00% Flat)
Commentary: today was yet another test for GDR’s Bullish idea, and once more, tomorrow’s data release will likely prove crucial in firming the Bullish Market Tone for next week.
S&P 500 Market Structure Insights for Tomorrow
Today was a narrow range inside day - i.e. the day’s trading range was entirely inside the previous day’s range. Inside days are a form of Balance and therefore Balance Rules apply. Specifically, 1) go with a breakout from Balance, 2) fade failed breakouts from Balance. Moreover, today’s trading suggest weak-hands, momentum traders were dominant. This tends to happen before key economic data is released (see below).
We are also carrying forward two key data points: 1) the Poor Low from 11 Nov which is in need of repair, and 2) the swing high made in the 15 Nov overnight session, which is also a weak high as it coincides with the bottom of a previous Gap down. This is a generally balanced backdrop and suggests there is little to no directional edge going into tomorrow.
Finally, and perhaps most importantly, today’s profile suggests trapped short positions below the POC (Point of Control). Focus on the yellow arrows in the chart above: it is clear that traders kept getting short at worsening prices throughout the day and ended the session under water. They may well become upside fuel for tomorrow as they scramble to cover their positions.
Potential Market-Moving Events Tomorrow
08:00am - FOMC Member Bullard Speaks
08:30am - Initial Jobless Claims, Building Permits, Housing Starts, Philadelphia Fed Manufacturing Index
09:15am - FOMC Member Bowman Speaks
09:40am - FOMC Member Mester Speaks