Balanced Day, Poor High at Latest New All Time High

After making yet another new all time high in the overnight Globex session at 2370.00, the S&P 500 E-mini U.S. pit session opened the week near the high of the previous week’s four day trading balance, and inside Friday’s late day spike above 2360.50. Generally, opening inside a spike shows acceptance of the higher prices from the prior day’s late price surge.

After trading through the top of the balance multiple times in B, C and D period, but short of the new all time Globex session high, price mechanically bounced off the open price at 2363.75 in the sixth (F) period before grinding higher to take out the new high by a few ticks, putting in a new all time pit session high at 2370.75. The new all time high can be considered a poor high on the market profile chart, since it has only one tick of excess at the L/M bar highs.

Monday’s point of control at 2366.00, just below the four day balance high, could be an early trading reference for Tuesday’s pit session. Although value had developed higher on Monday, the point of control did not migrate higher with the breakout from the four day balance.

If price does not make another new all time high during Monday’s overnight session, and opens inside Monday’s range, the POC could be early support or resistance. If the market opens below the POC and ignores Monday’s poor high, price should easily test Monday’s weak F period pullback low to the open and possibly retest Friday’s spike base at 2360.50. Below that level is a very prominent NPOC at 2358.00 that could act as a price magnet, pulling price back towards it.

If price does reenter and is accepted back inside the four day balance the lower extreme at 2351.00 (of the balance) has the potential to be a destination trade. If profit taking ensues and price sells off further, lower potential price targets are noted in this recent market profile recap.

Acceptance above Monday’s pit session point of control and close could easily see price test and repair the new all time high.

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ES – Look Below Balance and Fail, Destination Trade: Back to The Top of Balance

The market continues to be dominated by short term and day time frame traders with no longer term participation outside of the now four day trading range.

Friday’s ES pit session opened with a slight gap below the previous day’s low and reentered the three day balance. When price looks outside of a balance and fails, then reenters the range, the opposite end of the balance is the potential short term price target.

Notable market profile references for trading on Monday’s pit session trading hours are the very prominent point of control at 2358.00, and the late day upward spike from 2360.50:

– If price opens below the base of the spike 2360.50 it could be considered negative, as the late price probe or spike is rejected, leaving a selling tail.

– Opening within the spike above 2360.50 could show that price is accepted and keeps the rally in tact, finding a level where two sided trading can occur.

– Opening and trading above the top of the spike can imply that price did not trade high enough on Friday to cut off the buying and allow two-sided trade to take place.

Balance trading rules still could apply, depending on where price is at Monday’s open, as price was mainly contained inside the three day balance, making it a four day balance:

– Look above or below the four day balance and continue higher or lower.

– Look above or below the balance and fail and reenter the range, with rotation back to the opposite end of balance the potential target.

– Remain in balance.

Friday’s opening period low came within one tick of filling the gap at 2351.00. Value ended the session as overlapping to lower.

(the above post and all posts on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer

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Look above two day balance and fail, daily one timeframing higher stops

After the S&P emini Globex session traded to another new all time high at 2367.50 early Thursday in the overnight Globex trading session, the U.S. pit session gapped open above Wednesday’s high, just below the new Globex high. It was the fifth higher gap open in February, four unfilled gaps remain below the market.

Price did not take out the overnight session high and traded lower from the opening bell, filling the gap, and reentering the previous two day trading range. The two day balance high at 2365.00 became resistance.

When price looks outside a balance and fails, and reenters the balance, the opposite end of the balance is potentially the destination trade. Price traded lower for the first four periods, mechanically bouncing from just one tick above the two day balance low at 2352.75 in D period. By trading below Wednesday’s low, the market stopped one timeframing lower on the daily chart. The question now is, did the one timeframing lower on the daily chart just allow short term inventory to come back into balance, or is it a sign of more significant change to come?

Thursday’s low can now be considered a weak low, since it is almost exactly at Tuesday’s low. With apparently no longer timeframe players in the market, short term and day timeframe traders are controlling the market, buying and selling off exacting references. The rally off the D period low can probably be attributed to short covering, the rally stopped exactly at the two day balance high at 2265.00.

The two day trading range has now extended into a three day balance, balance trading rules still apply for Friday: look above or below and continue higher/lower, look above or below and fail, or stay within the range. Depending on where price is at Friday’s open, Thursday’s point of control at 2362.00 could be short term support or resistance. Price acceptance above the POC and Thursday’s high could see price test Thursday’s pit session all time high at 2366.75, and the new Globex all time high at 2367.50.

Failure to find acceptance above 2362.00 could lead to a test of the weak two day balance low at 2252.75, and potentially lower price targets as noted in Tuesday’s market profile report.

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