stretched out profile, many anomalies

multiple-anomalies-market-profile-chart

Wednesday’s profile left many anomalies, or “rough edges”, after one time framing higher in all but three 30 minute periods:

one-timeframing-higher-market-profile

Anomalies are generally a sign that shorter term, emotional traders were in control, such as in short covering, leaving behind poor structure. When anomalies aren’t “repaired” during the current trading session they are often repaired, or revisited in coming sessions. Carry the information forward to help judge the odds of upside or downside continuation the following day.

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Single prints revisited, rally into close

wide-point-of-control-and-rally-into-close

After an open-test-drive to fill the gap early Tuesday, the ES spent most of the day filling in some of the excess single prints from the previous two trading sessions, but price did not get acceptance back into Friday’s range until the K period rally took out the earlier poor high from B period.

If the ES opens Wednesday within Tuesday’s range the base of the late day spike at 2018.25 could be an early day trading reference, if more serious money was involved versus just short term short covering that level should hold. But the mechanical price level at the L and M period lows suggest short term traders buying at that level. Tuesday’s trading range could be looked at as a double distribution, with two separate balance areas.

Tuesday also left another prominent point of control at 2012.25, near the May monthly low. Very wide points of control, or the “fairest price”, are often revisited in future trading sessions.

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Market Profile Open Drive then Balance, Post Brexit

many single prints market profile

post brexit balance

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.

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