Key Intraday Levels

What decisions have been made by the market? This is always a very important question. Market movements are largely based off of the decisions that have been made, or are yet to be made. This is a crucial concept to pay attention to so that we can establish some sort of alignment with the market — whether it’s to look for access in a direction, or to simply understand that it’s best just to stay flat and out of the way. Intraday MGI levels can be very useful for this. My inputs include:

• RTH Session Open

• Overnight High/Low (ONH/ONL)

• Prior Day High/Low (PDH/PDL)

• Initial Balance Range + High/Low (IBH/IBL)

• Initial Balance Extensions (50%)

• 24HR VWAP

• London Session Open

In the photo above, we can see that the market made a run through the ONH into the PDH, where it was rejected to the downside. This is the first key decision to note — the market is currently not looking to transact above the prior day’s range. Next, it falls back under the ONH and the Open, and fails to sustain trade above those prices. This would qualify as an inability to extend higher. They have tested MGI levels to the upside and have decided to reject them. Noting this, you can speculate that weakness will continue.

At some point, however, it breaches under the IBL towards the GBX POC (Globex Point of Control), and finds a bid. This bid takes price back into the IB range, holds higher at the retest of VWAP and VAL, and finds continuation. There are key things to note here, as the market dynamics have shifted.

• The market has now tested under the IBL and found a lack of acceptance.

• The market has now decided to auction back above the IBL and back into the IB.

• Price has drifted back inside value and the market has accepted the range once again.

• The market then moves through the range — trading back above the Open, ONH, and through the PDH (now also the IBH).

• The market then makes the decision that it is no longer willing to do business under the IBH — it is then driven into and through the 50% IB extension.

Always be aware — which decisions have already been made, and what is the likely outcome? What MGI reference or key level is the market headed towards, and where did it come from?