Candles & Ticks | Daily Digest 09/20/2022
Stocks fall as rates rise in anticipation of tomorrow's third straight 3/4 point Fed rate hike
Market Overview
The markets gave back most of yesterday’s gains. All four indices and 11 sectors dropped, with real estate leading the fall. The 10-yr closed above 3.5% and the 2-yr inched closer to 4%. All eyes will be on the Fed tomorrow as they’re expected to raise rates by another 75 bps. Below is a table of all four Fed Funds rate increases in 2022. In addition, the S&P 500’s performance the day of the announcement and following two days is included along with the average.
Here are some of today’s closing prices.
Top-Down Analysis
Below are the monthly (5-years), weekly (2-years) and daily (6-months) charts for ES.
M/M: After rallying above the high of the previous 3-months, August lost 4% M/M. It closed below the midpoint from the prior 3-month range. ES has been balancing from May to August. Unless the month of September can eclipse the 4327.5 August high, ES will be OTFD.
W/W: ES had its worst week since mid-June. For the past 3-weeks ES has been in balance.
D/D: ES is in balance the past three sessions. 3834 and 3820.25 were the last unbroken lows in the 3800 range on the daily chart.
Performance & Metrics
Performance
Metrics
ES Composite Volume Profile (5 days)
ETH VAH: 3936
ETH VPOC: 3880
ETH VAL: 3846
Here is a chart of the past five sessions with a composite ETH Volume Profile:
ES RTH Volume Profile (today)
RTH VAH: 3883.75
RTH VPOC: 3871.25
RTH VAL: 3863.25
Here is a chart of the past five sessions with a daily ETH/RTH split Volume Profile:
ES RTH Market Profile (today)
RTH TPOC: 3874.50
RTH Poor Low/High: n/a
RTH Single Prints: n/a
RTH Excess: 3843.25 to 3845; 3890.5 to 3893.25
Here’s a TPO chart of today’s session with ETH/RTH split Market Profile:
Session Recap
Electronic Trading Hours (ETH)
Globex Session:
Wholesale was long at the prior day’s close. The ONO was inside the previous day’s price range and above the value area. Inventory during Globex was 58% long. The prior day’s HOD was eclipsed however sellers pushed the auction back underneath the high. Once London opened up, supply pressure increased. ES steadily fell and lost 50-points through the remainder of RTH to end up inside of the previous day’s value area.
ONO: 3923
ONH: 3936.25
ONL: 3883.75
Range: 52.5
Regular Trading Hours (RTH)
US Session:
RTH opened inside of the prior day’s value area and above the T+2 low. Sellers continued to apply downward pressure on ES at the open. The auction dropped below the prior day’s value area before short covering began. It dropped lower over the next few time periods with supply losing steam at 3859. Buyers lifted ES 30-points to get the price back into the prior day’s value area. Unable to get back above the prior day’s VAH, buyers faded at 3893.25. Sellers erased the prior session swing low as it moved the market below the prior day’s value area and LOD. At 3843.25, short covering stabilized ES again. ES rose 40-points and got back into the prior day’s value area. ES ended RTH at 3879.75.
O: 3882.75
H: 3893.25
L: 3843.25
Range: 50