Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

State of the Market – 20th June 2022

1 min read

It’s Monday morning and SGX Nifty is trading sub 15300 levels and a little bit of nervousness in the markets as the last Thursday’s price action of the deep plunge from 15800+ levels to 15300 levels brought a big bearishness among the short-term traders.

Nifty Futures – Daily Sentiment

US Markets are on holiday due to Juneteenth National Independence Day and that brings subdued global cues moreover last Friday most of the global markets closed in a neutral mode despite Thursday’s aggressive selling activity globally.

Short-term, medium-term, and long-term trends (all the higher timeframe) were turned down as of last Friday. Even the short-term indicators (15min and hourly) are also down. However, on the other side, two important defenses came from Extreme Indicators and Orderflow

Defense 1: Extreme Indications

Extreme Indications bring extreme negative sentiment on the hourly timeframe and at times it proves to be a powerful signal for the long trading opportunity.

Defense 2 : Orderflow – Smart Money Commitment

Orderflow brought smart money commitment last Friday which indicates a possible smart money buyer stepped in at the low. And maybe if the Friday low is protected on Monday’s trading session then the odds of the current short-term swing could be bottoming out.

How to think in mixed information environment?

When higher time frames are painting a complete bearish picture and extreme sentiment and orderflow are showing signs of bottoming out. I would give more importance to the immediate information for example signals on lower timeframe like 15min charts. That could say how one has to align with the market and keep one open to both the possibilities of bullish/bearish trades.

That narrows down to coming up with trade scenarios rather than being adamant by looking into one side of the information.

Scenario 1 : (Bullish Scenario)

Price opens above last Friday Prominent POC and rallies with open drive could bring a potential bullish case and could have the odds of trading towards 15500 and higher in a very short term

Scenario 2 : (Bearish Scenario)

Price opens inside the range and rejects the prominent POC to the downside. This has more immediate odds of bearishness and could push down the price towards 15200 and 15100 levels.

Scenario 3 : (Sideways Markets)

Price opens inside the range and trades around last Friday Prominent POC could bring more of a two-way auction process and that could lead to more rotation and sideways price action with a possible overlapping value area which could restrict the trading opportunity to a greater extent.

Start the Week with a neutral bias with the given market-generated information and indications and let’s see where it takes! Just getting prepared for whichever side the market takes.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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