Market Analysis - 02.13.2020
Updated: Feb 14, 2020
OUR APPROACH TO KEY LEVELS
We determine key levels in the market by looking at high volume nodes from the volume profile as well as looking for strong rejection areas in price. These are our key reference levels throughout the day and are always updated daily. When the market has not moved much, like $CL in the past few days, reference levels will most likely be the same. We use a daily volume profile overlay upon price as well as a OPT EXP volume profile set in the expansion area to the right of price on our charts. To determine these support and resistance levels, we first look at the 20d 1h chart to see the longer term high volume nodes of the expansion profile. This time frame works best for day trading, in our opinion, to determine where big swings/reversals are likely to occur, thus providing the best risk to reward opportunities. Next, we move down to the 10d 30m chart to the high volume nodes there. We mark each high volume node with a price level line. Once these levels have been noted for both the 20d and 10d, we are ready to be patient and look for price to touch these levels. Once price approaches these levels, we look at price action and #OptionVolume to determine trade entries.
CRUDE OIL
Key Support Levels:
50.96
50.74
50.48
50.15
50 - GEX
Key Resistance Levels:
51.28
51.45
51.73
51.95
52 - GEX
52.43
S&P 500
Key Support Levels:
3352.50
3343
3336.25
3326.50
3304
3300 - GEX
Key Resistance Levels:
3360.50
3365.50
3373
3382.50
3400 - GEX
FINAL THOUGHTS
Crude oil futures have dropped below previous value area briefly, but are now back within this range. This indicates a slightly elevated chance of downward movement today, but more likely is a range day with price remaining in previous value area.
S&P 500 futures are dramatically lower this morning, falling way below the previous value area. This movement exhibits strong seller influence and we are most likely looking at more downward action as the day unfolds.
After news of largely unreported cases of #coronavirus in China, expect to see some weakness in both $CL and $ES today and of course, increased volatility.