This is what excess at the high looks like on a daily chart

excess at the highs on the ES daily chart
Significant excess at the highs on the ES daily chart

This is what excess looks like on a Market Profile chart, something the market has been lacking when printing new all time highs until now. But will it hold? On the market profile chart for this trading session, price rallyied on split volume from contract rollover, one-timeframing higher for most of the day trading to a another new all time high on the ES at 5561.00. There were really no price levels where reasonable two sided trade could take place until the final three 30 minute periods of the day, just off the highs.

Market profile one time framing trend day on the ES S&P 500 e-mini chart
Market profile one time framing trend day on the ES S&P 500 e-mini chart

Markets don’t often go from a bull market trend to a bear market trend, they will usually consolidate first, but significant excess could signal a major market reversal coming soon.

For the next regular day trading session hours, failure for price to make a new daily and new all time high should see price target some of the anomalies on the market profile chart. There is really no meaningful market profile point of control on a trend day – on this profile chart the market never printed more than four TPO’s’s (time-price opportunities) at any given price. Monitor value for acceptance or rejection (price above value area, below value, or within the previous value area range), as this trading session’s value area was extremely large.

If the overnight trading session fails to make another new all time high, look for shorts to enter the market during the next regular day trading session. On the contrary, price acceptance above this latest all time high potentially targets 5600, another psychological price level in an overly euphoric stock market. And although there is significant excess at this latest all time high, on the market profile chart there are only two TPO’s of excess.

The first hurdle for the market to overcome for any significant downside selloff is the late day pullback low at 5542.75. Price acceptance below that level should bring in more aggressive selling.

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