Morning Session:
The trading day began with a positive market reaction to the CPI print, which came in at 2.8% YoY, slightly below the 2.9% forecast and the previous 3.0%. This led to an initial upside move, with the ES hitting its target zone of 5640 – 5650 shortly after the announcement.
By 8:49 AM, the NQ had also reached and exceeded its upper target zone of 19635 – 19680 following the CPI release. Shortly thereafter, PTGDavid noted that the ES 3-Day Cycle Rally Target of 5669.75 and the NQ 3-Day Cycle Rally Target of 19776 had both been fulfilled.
As the session progressed, PTGDavid maintained a long bias, provided that price remained above VWAP & Open Range, but around 9:49 AM, he signaled a shift to a sell lean while advising traders to remain flexible. By 10:03 AM, he confirmed that the ES Open Range Short Target 1 had been fulfilled.
Midday Session:
As the market moved lower, PTGDavid identified LIS 5590 as a critical level. Once it was violated, he noted that it had opened the door to the next Value Area Rule (VAR) target at 5567. This played out precisely, as 5567 and 5565 were both tagged by 11:02 AM, officially fulfilling the VAR move.
At 11:07 AM, he highlighted the next potential downside target zone of 5550 – 5540 if prices continued to stay below 5590. Within minutes, 5550 was tagged, further confirming the bearish scenario.
However, by 11:19 AM, he suggested that key levels were in place for a potential bounce, and by 11:32 AM, he noted that price had reclaimed 5565 from 550, setting up a PKB long opportunity.
Shortly before heading to lunch at 11:54 AM, he pointed out that price had rallied back to the Midpoint VWAP Zone.
Afternoon Session:
Upon returning, PTGDavid highlighted that bulls needed to reclaim the 5625 – 5630 zone to push higher. Around 2 PM, he anticipated a “Shake n’ Bake” move, and the market delivered, first shaking out weak hands before rallying.
At 2:20 PM, price found responsive buyers at 5590, a key level from earlier in the day. He reiterated that bulls still needed to break through 5625 – 5630 to confirm a sustained upside move.
Approaching the final hour, PTGDavid shifted focus to the closing MOC (Market on Close) dynamics. At 3:50 PM, he reported a $2.5 billion MOC sell imbalance, but by 3:55 PM, this flipped to a buy as all supply was absorbed, leading to a sharp final push upward.
He wrapped up the session at 3:57 PM, noting that the market closed near the mid-VWAP level, in a balanced state.
Key Takeaways:
- The CPI print drove early bullish momentum, fulfilling key upside targets.
- A shift to bearish momentum occurred after 5590 was lost, leading to a rapid drop to 5567 and 5550 targets.
- Buyers stepped in at key levels, prompting a midday recovery back to VWAP.
- The closing MOC imbalance initially signaled selling, but supply was absorbed, leading to a final rip into the close.
Overall, it was a well-structured day, with price action respecting key technical levels, allowing traders to execute both bullish and bearish scenarios with precision.