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Morning traders!

Hope you’re all navigating FED week with success out there on the charts.

QuantVue team is back again with another value-packed market brief.

Let’s jump into it…

Market Evaluation

Volatility will be present in today’s session as well as going into tomorrow where the most important day of the month for the FED will bring a challenging session for both sides before the report and the Powell’s speak.

Stocks fell and bond yields rose on the eve of the Federal Reserve decision, with higher oil prices bolstering speculation interest rates will be higher for longer to prevent a flare-up in inflation.

After boosting interest rates by more than five percentage points over the last 18 months.

Fed Chair Jerome Powell and his colleagues are widely expected to hold them steady Wednesday.

Markets Breakdown

Yesterday’s session was contained between our levels of interest that we were watching since the overnight market report (here).

The first opportunity presented itself after the market opened with a gap to the downside from Friday’s RTH session.

A general rule of thumb we would need to pay attention with gaps is that there is around 70% chance that you get a counter auction relative to the overnight session.

That means that when the market opens with a gap below the previous RTH session, there are 70% odds that the market will retrace back up to fill this imbalance area.

If you don’t get that counter auction, that can indicate weakness depending the upside/downside direction of the market.

This could be observed both on Thursday’s and Friday’s auctions of last week.

Markets opened to the upside on Thursday with an exhaustion gap and after the failed breakout above the balance area, Friday’s session opened with a downside gap with no meaningful participation from the bulls to fill it back up.

Yesterday’s gap was a small imbalance that was filled up within the first minutes of the session.

The selling aggression that began 2 hours before the market open saw no continuation to the downside.The market opened and bounced at the exact support level of 4490 that we were observing since the ON session and saw a consolidation above 4497. 

That triggered continuation towards the first upside target of 4514 where buying effort was completely negated, and the price rolled over back to the major support of this range at 4497.

Read the thought-process of what we were watching through-out this session relatively to the levels we’ve posted before the RTH session started here.

There is a pretty major difference between spotting the exact levels of reversal to the tick and drawing long fat boxes of S/R that range 0.15-0.20% from one side to another. All that posted over 6-7 hours before the market opens for business.

Levels aren’t defined s/r by themselves, we simply observe and add context to the movement of price and act accordingly.

Just because price will reach a level of interest doesn’t mean we go long/short if the context of price action at that time doesn’t suggest that as a safe opportunity.

Having a pre-market plan is a pretty crucial step in the long-term success in trading. Understanding the nature of the markets begins with journaling all your trades and how you responded to them as well as backtesting your strategy.

Learn from the past, strategize for the future. Your trading journal is your bridge.

 👉We’ve build the perfect tool for this here $ES 1h Targets

ES

The targets we look for until NY close & Targets to pay attention Tomorrow:

• Upside Levels: 4482/4494/4520

• Downside Levels: 4464/4450/4420

That’s all for this week’s Tuesday brief.

We’ll see you on Thursday after tomorrow’s FED meeting.

Cheers!

-The QuantVue Team

P.S. — we posted a YouTube video today breaking down our NEW Qbands indicator: