Yesterday's trade couldn't quite fill the gap, stopping short of it by about 1 point. Rallying up to the value high, it met sell resistance, but just couldn't keep value pinned down in the then-lower distribution area (1997-2000). By the end of the day, that previous value high had become the PoC, with lower prices rejected again.
Today, we're set to open near the all-time high with overnight trade all long and a gap beneath all the way to 2011.25. This gap is large enough to demonstrate buy conviction, and the gap rules mentioned in the previous post are in play.
If the gap holds:
1) Rotational Scenario: market just sits up here, trapped in a range and unable to make a meaningful departure from the value area over time. In this case, look for a buy opportunity around value low once enough time has passed and failed downpush attempts made to establish the market is unlikely to fill the gap.
2) Pushgrind Scenario: market is staying at/above PoC, slowly sloping upwards and trapping sellers along the way. Just like the previous scenario, give it some time to establish that it will continue to grind higher, with acceptance at these already record prices. Once it's established, look for an untested previous high area to enter on a pullback.
3) Power Rally Scenario: unlikely to occur due to this being the life high on low volume, but in case it does, look for a one-way upmove off the open (no more than 1 tick printed under the opening print). Enter as soon as possible on a pullback to an intraday support level.
If the gap fails to hold and the market moves to 11, look for possible continuation of the move to yesterday's upper distribution support at 01, and then yesterday's buying tail at 97. Further continuation would see the previous gap that yesterday attempted to fill completed with a move to 94.
However, failure to continue down into yesterday's value creates the possibility for a rally later on.
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