[ad_1]
In this article, we examine the significant weekly order flow and market structure developments driving XLU price action.
As noted in last week’s XLU Weekly, the highest probability path for this week was for price discovery lower within the context of an uncompleted corrective phase. This week’s primary expectation did play out, albeit modestly, as aggressive price discovery lower developed early week to 58.69s where buy excess developed, driving price higher to 61.14s into Friday’s auction, closing at 60.87s.
NinjaTrader
04-09 August 2019:
This week’s auction saw buyers trap early in Monday’s auction, 60.27s, failing at/near last week’s settlement. Price discovery lower developed achieving a stopping point, 58.97s, before buying interest emerged, 59.36s, into Monday’s close. Monday’s late buyers failed to hold the auction, driving price modestly lower, achieving the weekly stopping point low, 58.69s, near key support in Tuesday’s trade. Structural buy excess developed, 58.69s-59.05s, halting the sell-side sequence. Price discovery higher developed to 60.26s ahead of Tuesday’s close.
Minor price discovery higher continued in Wednesday’s trade to 60.54s before buy-side continuation developed through Thursday’s auction to 60.96s. Minor price discovery higher developed early in Friday’s auction, achieving the weekly stopping point high, 61.14s, near major resistance. Structural sell excess developed, halting the buy-side sequence as balance developed, 61.14s-60.65s, ahead of Friday’s close, settling at 60.87s.
NinjaTrader
This week’s auction did see the primary expectation play out, albeit modestly, as price discovery lower to key support met with buy excess and price discovery higher to test key resistance. Within the larger context, balance development continues at all-time highs with no secured high (implying buy-side activity has not been shut off).
Looking ahead, the focus into next week will center upon market response to this week’s key supply cluster, 61.14s-60.65s. Buy-side failure at this key area would target key demand clusters below, 59.50s-59s/58.40s-57.80s, respectively. Alternatively, sell-side failure at this key area would target new all-time highs. From a structural perspective, the highest probability path near-term is sell-side following an uncompleted corrective phase. Within this near-term context, the intermediate term (3-6 month) remains buy-side barring buy-side failure at 58.94s (which held this week).
KoyFin
It is worth noting that sentiment based on the S&P Utility Sector Bullish Percent Index is now trending lower from extreme bullish sentiment. Stocks more broadly, as viewed via the NYSE, have also seen declining bullish sentiment. Asymmetric opportunity develops when the market exhibits extreme bullish or bearish sentiment with structural confirmation. While structure is buy-side, caution is warranted in utility shares due to sentiment in both the broader market and utility sector.
StockCharts
The market structure, order flow, and sentiment posture will provide the empirical evidence needed to observe where asymmetric opportunity resides.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
[ad_2]
Source link Google News
