Thursday, September 17, 2009

Morning Briefing for September 17th: Range Trade

8:28 AM CT - Note how, after the numbers, we have been accepting value below the day's VWAP. I will be watching how we trade relative to VWAP early in trade to see if we're going to move lower vs. use early weakness as a buying opportunity--a pattern we've seen in recent days.

When we have economic numbers coming out before the market open, as is the case today (a list of numbers scheduled is posted before the market open via Twitter;
follow the stream here), I like to take a look at how the day structure looks before and after the reports. That tells us whether the numbers are truly making a difference in terms of how the market is setting value for the day.

What we see before the numbers this morning is that the market is trading in a tight range, oscillating around the day's volume-weighted average price (red line). If the numbers are going to make a difference, we should reject this range and begin establishing value higher or lower.

I will update this chart before the open and after the numbers to track the market's evolving day structure--which, in turn, should help us generate trade ideas on the day.