Market RECAP – Key Observations and Strategic Levels for 10/28/24

Today’s session began with the critical “Line in the Sand” (LIS) level set at 5865, which proved resilient through multiple tests. Early trading momentum allowed the first target zone of 5880-5890 to be fulfilled, but lack of sustained volume on breakout attempts prevented further bullish advances.

Throughout the morning session, trading remained confined within a tight 10-handle opening range, with no clear directional bias. Buyers responded positively to backtests at 5865, yet volume continued to be insufficient to fuel significant breakouts. PTGDavid noted that any meaningful breakout would require an uptick in volume, which was largely absent, creating a challenging environment for intraday traders.

By mid-day, 5865 was re-tested and held as a support level, though a minor dip to 5860 reflected intraday volatility within the LIS’s acceptable tolerance range. Afternoon trading witnessed a “double bottom” structure forming around the 5860 level, with clustered stops below this point, signaling a possible stop-hunt scenario in play. Despite subdued volume, buyers maintained 5865 as support, with a requirement to reclaim the 5865-5870 zone to establish upper support and potentially drive higher moves.

PTGDavid highlighted that the tight range and lack of momentum rendered the day largely directionless, encouraging caution against getting “caught in the chop.” As trading concluded, the 5860 support level was solidified as a key marker for the upcoming session. Notably, the day closed with a MOC (Market-on-Close) sell imbalance of $1.5 billion, hinting at underlying bearish pressures heading into Tuesday.

Strategic Takeaways:

• Primary Support: 5865 (maintained through multiple tests) with an ultimate intraday floor around 5860.
• Resistance: Target zone of 5880-5890 achieved early, but volume remains a gating factor for additional upside.
• Outlook: Given today’s volume limitations and tight range, traders are advised to remain cautious of potential volatility on Tuesday. The 5860 level will serve as the new LIS for the next session, with buyers needing a reclaim and hold above 5865-5870 for sustained bullish momentum.