Yesterday’s session closed with a multiple-distribution TPO profile, creating a more complex and nuanced setup for traders. The volume profile, however, displays a P-shaped structure, with the POC around 6829 acting as the key level to determine directional bias. As long as price remains above the POC, the market favors buying scenarios, with the VAH near 6836 serving as a supportive level on any pullback.
 

From a macro perspective, risk sentiment has softened. Equity indices have traded lower this week, with capital rotating out of Russell 2000, emerging markets, and Bitcoin, weighing on overall risk appetite. Dr. Copper shows tentative support, while lower crude oil prices contribute a deflationary impulse. At the same time, a stronger dollar remains a headwind for equities. Volatility remains suppressed, which is still supportive, and rate-cut odds improved following yesterday’s easing inflation data. Yields are showing dovish signals, and credit spreads remain healthy.

As outlined, cooling inflation combined with a softening labor market supports the case for future rate cuts, although expectations for a January cut may still shift toward a hold. Adding to the complexity, Japan’s recent rate hike introduces an external pressure factor.

Overall, the environment supports selective buying scenarios, driven by easing inflation and improving rate-cut probabilities. However, conflicting global signals, particularly tighter policy abroad, are likely to keep the market rotational and data-dependent until greater clarity emerges on the Fed’s policy path for next year. As of Friday, awaiting a pullback, due potential profit taking, to reload on core long positions towards the New York trading session might be favored.

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