Sellers appeared on the open of the S&P pit session on Monday, with a Market Profile ‘A’ period (first 30 min.) “open drive” on high volume. ‘B’ period retraced to just one tick below the half-back level from A period, a very mechanical and visual reference.
Momentum traders then piled onto the short side as both US services PMI and Dallas Fed Manufacturing activity missed expectations, probably helping to drive price lower, down to 1981.50. Price rallied 16 points off the low, forming a lower distribution below 1997.
Price couldn’t break above the matching G and H period highs, and sold off again with ‘L’ period later testing the low of the day exactly at 1981.50, forming a poor low (D and L matching TPO’s). Poor highs and lows are usually revisited, or “repaired” in coming trading sessions.
Looking ahead, treating Monday’s lower distribution as balance, three possible trading scenarious (depending on where the pit session opens on Tuesday) are:
1. looking either above or the below Monday’s lower distibution and accelerate higher/lower.
2. looking either above or the lower distibution and failing, returning back within balance. Potential destination is then the opposite end of the balance.
3. Remain within balance.
There is a prominent, 11 TPO wide point of control at 1991 that has good odds of being revisited. Breakouts should have a better chance of following through if the wide POC is revisted first.
Trading with acceptance back into the upper distribution above 1997.50 could target/fill in some of the many single prints to and above Monday’s high at 2110.75 and June’s monthly low at 2012.75, followed by the top of the gap at 2016.25, and Friday’s close (top of single prints) at 2021.75. With only three trading days left to the month there is now the possibility of June being an outside month, if it closes below May’s close at 2012.75.
Potential downside targets if a high volume breakout occurs could include the two similar lows from April 2nd and 10th, at 1947.75 1948.50.