Evening wrap, may 18
market vibes
Since the war is drawing crawling to the finish line I thought a simple review of most actively traded prices and areas of fair value would be useful.
We’re going to look at large samples of Market profile compresion studies tonight to identify only these 2 things: the most actively traded price in each market or “point of control” (POC) from March 9 to May 18… and the areas of fair value above and below the POC…
If you are not familiar with Peter Steidlmayer and his work there are any number of tutorials on youtube and in text form with a google search. Pete is to market analysis what Buffett and Peter Lynch are to value investing, immho.
These charts represent the entire period of the active war and the blockade. Each letter in the compressed profile means the market traded at that price at least once in each 30 minute period of the 23 hour day structure. Click on the chart to enlarge it.
What I do to create them is left click on the day structure of each, and drag and drop them together one at a time beginning with today and ending at March 9. The reason we want to identify the point of ccontrol (POC) is because that is where the most losers have located their trades. Let that sink in… You’ll get it if you do a few minutes of reading.
so.. here we go
The most actively traded price in June WTI is $90.00/barrel. The top of fair value (the 1st standard deviation or 70% of all traded prices) is $99.00/barrel. The bottom of fair value is $85.50. I won’t belabor my sense of the latent supply of oil trapped in onshore GCC storage, floating and sacnctioned seaborne oil and falling demand. Everyone knows what everyone knows.
What I will say is long time frame range compression creates a very dense volume of risk at the same level and when prices finally move away from the most actively traded price …. with losers driving direction… the moves can swift and big. See the bitcoin charts today at the bottom of the note…
