Opening Remarks and Market Setup
As the session commenced, PTGDavid noted key economic events on the horizon: U.S. PPI data and initial jobless claims at 8:30 AM ET, with Federal Reserve Chair Jerome Powell scheduled to speak at 3 PM ET.
He highlighted the previous day’s observation of notable “pinning” activity around 6000 on the S&P 500 (SPX) and 6028 on the E-mini S&P (ES), with heavy gamma flows likely to maintain this pattern barring significant exogenous triggers. This level, referred to as a “strike,” was anticipated to anchor price movements unless substantial market forces emerged.
Early Session Dynamics
At the opening bell, SPX demonstrated a mean-reverting behavior towards the 6,000 level, reinforcing PTGDavid’s anticipation of a continuation within this range. He set a “Line in the Sand” at 6020 +/- 5 points, suggesting limited volatility unless the index broke away with support from broader flows.
Buyers initially struggled to take control, with price movements retesting prior lows near 5991.75, but subsequently found support as prices bounced back toward VWAP, indicating buyable pullbacks with cautious positioning below recent lows.
Mid-Morning Activity and Observations
As the morning advanced, PTGDavid provided insights into trade triggers, including a whiplash long entry in the NASDAQ-100 (NQ) and observations of conflicting price paths between ES and NQ, with ES displaying relative weakness.
By 10:55 AM, he noted a “grind” around the VWAP, signifying limited trading opportunities as the market lacked a clear directional edge, prompting him to stand aside.
Midday Trends and Technical Signals
Entering midday, PTGDavid noted the market’s adherence to “Cycle Day 2” rhythms, characterized by range-bound movements typical for such days. The previously defined “Line in the Sand” zone around 6020 acted as firm resistance, with lower target zones fulfilled as price levels dipped to test prior lows. Multi-day consolidation continued, suggesting no strong directional breakout and leaving prices largely in balance.
Afternoon Fed Commentary and Market Response
In the afternoon, all eyes turned to Powell’s remarks, which provided a brief opportunity for “buy-the-dip” traders amid an uptick in market volatility.
PTGDavid observed that, despite Powell’s comments, rate futures still leaned toward a December rate cut, though probabilities were trimmed slightly. However, traders ultimately showed restraint, with the session closing out as a “non-event,” with MOC orders indicating minimal impact.
Summary
Throughout the day, PTGDavid maintained a measured view, emphasizing the importance of patience in a low-volatility, gamma-pinned environment. The session’s price action stayed within anticipated ranges, with Fed commentary and economic data having only limited influence on any breakout attempts.