Narrative, Visualization Exercise and After-Hours Report:

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After Hours Report:
Structure was pretty clear from the start. Anytime value is an inside day, the odds right there shift towards a balanced day. You're analysis that the market would test range highs was decent. The real problem was the fact that you were unaware of the economic calendar today. And that threw on economic monkey wrench into the equation. Right after the report at 11:00, program selling entered and the market chip chopped lower.

NYSE Volume: 3,592,000
Globex Session Visualization Guess: Up. Google the big earnings report tomorrow.
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8:15--
Structure: A very tight range balance of 5 points. The overnight inventory is very long and subject to re-balancing. Look above the overnight highs and fail increases the odds that there will be a gap fill attempt. Value is almost completely within yesterday's value area.

Visualization & Odds: I visualize that there will be 80% chance a gap fill attempt and quite possibly even a full gap fill. I think that the long overnight inventory is ripe to be rebalanced. Beyond that I visualize a balanced type day as value is not in any hurry to move.

Tactics: I will be very interested in a possible long entry at gap fill around 1356.
I am also interested in shorting here at 1367 to play for what I think is a high odds move into the gap.

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Grade: B -- You guessed right that they would test into the gap. All today did was a minor low into the gap, and that was your signal to abandon downside bias and go long. I wish that I addressed this possibility in tactics because it was a REAL possibility.
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9:00--
Structure: Small, minor low into the gap. Price has rotated back to the point of control. Inter market themes are mixed to neutral.

Visualization & Odds: Small move into the gap reversed. And the question is now whether or not that WAS the gap fill attempt or the market will reverse, move back down and attempts gap fill again. I think that the odds are the low of the day is in and that the market is now free to explore back up to the highs of the range. I just think that the sellers had their chance and there just wasn't any business to be done at lower prices.

Tactics: We closed our short trade as the look down into the gap fill failed. Based on our visualization of high odds move back up to range highs, we are going to reverse and go long. with a target of range highs or higher.

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Grade:B -- Your ideas were sound, even though the trades did not work. It was just a lazy balanced day. You get an F for not looking at the economic schedule and noting that the budget report came out at 11:00. But you get an A for reversing your trade, even if it did not pay.

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10:30--
Structure: True balanced day now. With the failed look down into the gap, price basing around the vwap, sediment still positive, and the Russell 2000 divergent to the upside. I'm on the lookout for a late session push to range highs. The psychology is simple: the sellers push down the best they could yesterday and stopped. The overnight inventory got long, and was unable to be rebalanced. All of this points to the fact that the path of least resistance is higher.

Visualization & Odds: I think there is a 70% chance that the market closes at or near its range highs. And a 30% chance that it just stays in its current, and balances tightly or the remainder of the day.

Tactics: Still in our trade from 1367 long with a target of 1372. I think that sediment is sufficiently positive today for a high odds test above range highs.

11:00 -- A report came out and produced a program sell move off of highs. So far it looks like a fake-out bar as the vwap is holding. Either way, the VAH has proven to be a ferocious foe to the upside. Yet another program sell tick -800, so far no downside continuation. I'm on watch to close my trade as this economic report has brought in some sellers.

11:12 -- Nasdaq breaking range lows here, so we are out of the trade. News has changed the dynamics of how the tape is performing and I don't feel like taking a full stops on a wishy-washy trade. We are down a point on the day with two trades.
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Grade: F -- your total lack of preparing for the numbers release screwed up your entire analysis. On top of that you re-entered your trade for a full stop. You took two mid-range trades on a true balanced day structure.

I'd give you a worse grade than F if it were possible.
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