Market Analysis for The Week of 11/16
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In last week’s post above the paywall I suggested that sellers had accomplish something they had not since coming off the April low. Further, that if we ripped higher on news of a resolution to the shutdown (both of which we ended up getting) that the signal needed to be carried forward anyway:
Sellers did not defend any key area on Sunday night into Monday. They did, however, defend all pops above the 11/2 week all-hours VPOC on NQ. This ended up forming a trading range in the first 3-days of the week. This had us cautious, even bearish, into Thursday. From Wednesday night’s plan:
It looked to me like sellers were intentionally covering ahead of each prior day low, so as to defend pops and accumulate before triggering a breakdown:
We saw Wednesday night/Thursday morning make a failed push above the upper edge that was met with responsive selling. This short setup ended up resolving for more than 1000 handles into Friday’s low which was an absolutely massive spot outlined in last week’s plan and reminded in the Friday premarket update:
Friday’s open immediately triggered the LBAF of 24643-24669 and the “violent reversal” was underway.
Was Friday just a cover rally, or are indices finally about to find the strength they’ve been lacking?
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