Early Year Volatility
Neutral Zone and Two Directional PA?
Good evening!
A bit of a later report this weekend. We have a bit to cover but mostly recycled ranges and similar type conditions with a slightly different market dynamic, considering we have been pinning in the neutral zone which of course can create some back and forth PA, on both upside and downside. But the real question is whether or not the market is prepared to finally break to new range, ideally 7028-7032+. As I’ve mentioned in the year-end report, we can see a ton of back and forth beneath 7028-7032 and remain essentially ‘stuck’ within a battle of zone-to-zone aka 6888-6932 to 6988-7032, with the channel acting as a nesting area.
This volatility was primarily due to reclaiming our 346 point ranges the week prior and failing to clear the 7k mark and our 7028-7032 core ranges. The conditions heading into the prior week was that in order to have any odds of tagging 7k, we’d be required to sustain the zone this time above 6888, ideally over 6899-6906, with higher sustainment above the zone (6932), being ideal —>holding the channel over 6933-6938-6944.
Secondary conditions for later in the week was that we were required to pin at a minimum of 6966+ in order to have odds of re-entering the zone over 6988 and retesting the 7k overheads, with a ton of confluence near 7012-7017-7019 areas for the week.
If you missed the closing stream yesterday I mentioned that if we close over 6966+ and manage to avoid the channel and sustain the means over 6952, we have odds of retesting 7006 and a tiny bit of room higher with ranges calculated near 7013-7017-7019 are (that was my max range I had said for the week due to 8 point reductions.). 6966-6972 are aligned with 22/34 pt ratios off highs/lows/open/close. 6966 is the minimum close needed in order to avoid retesting 6933 aka the channel if we fail to do so, that’s what would put 6900-6901-6912 in play. It’s crucial that we sustain above now and hold over 6954-6958-6966 in order to retest 7000. While 7024-7028 could still happen, odds were higher near neutral ranges at those increments.
It’s fair play here and the ball is still technically rolling in bulls court but there are a few conditions required first that would need to get that ball rolling again and preferably towards that 7k mark.
This played out extremely well the week prior, after sustaining 6934+ and breaking that 7k mark, with a ton of confluence near 7017-7019 areas. We ended up stalling right at 7017.50, pinning neutral at 7004.
Not much has really changed and considering we still opened in a neutral zone (7007), we could still experience some volatility. Specifically since we didn’t tag 7028-7032 as these areas have more confluence in terms of upside continuation. While we still triggered 7022-7025 areas, over 7028 has a bit more strength. That being said, we will be very mindful of our 4d structure that flips on the 14th. That would make the 13th the final day ahead of the flip and pretty vital to watch for structure formations on that specific timeframe.
Although we are already approaching the 14th, it’s good to still cover the previously met conditions from the week prior. Let’s review.