We finally got a breakout of the recent range which led to a squeeze higher through the prior all time highs. The market stalled in the 86-88 area accompanied by mainly negative TICK momentum. The squeeze higher had left many single prints on the profile and along with threatening rhetoric from Trump towards North Korea, prices quickly collapsed through the hot air that lifted them.
The merged profile below shows the recent area of balance. The directional move away from value yesterday went straight down to the low of the balance range after making new highs. The bounce off the 61.50 area saw sellers step in just ahead of the value low at 68, and until prices can move back inside that value area conditions remain neutral/bearish.
The bottom of the current range is at 57.00 which I would expect to get tested. However, if we don't see further weakness to push into that level, overnight shorts will be trapped above the 68 area.
The current range overnight is 2459.00-70.50. We could be opening on a range and settlement gap lower - prior low at 67.50 and settlement at 72.75.
Expecting rallies to be sold - a break through 68 though could lead to a squeeze up to yesterday's close at 72.75 where I'd expect sellers to step in. However, that is the high volume area of the recent balance so trade could be choppy holding there.
With lack of further shock headlines we may see an attempt lower into the 57.00-58.75 zone be bought up and get a move back into the month's vpoc at 72. If we sell off and fail to get back above the 61.50 level then I'd look for further weakness possibly down to 51.50-52.25 and 47.25-48.00 zones.
New zones for today: