ES Remains in Range After TrumpCare Bill Pulled

After a no-vote on the repeal of ObamaCare in the US House of Representatives on Friday the ES stayed in its 2 1/2 day trading range, just briefly looking below it late before short covering into the close

Split-view Market Profile charts on March 23rd and 24th:

The ES opened near the center of the recent trading range and traded at a sluggish pace early as traders still waited for the House to vote on the repeal of ObamaCare and replacement with TrumpCare. Price grinded higher exactly to Thursday’s rally high at 2352.00 in C period, trading a few ticks above it in D period to the level the market broke down from on Thursday.

A sharp spike lower in F period ran the stops below the near matching C/D/E lows, but with no continuation the market bounced back to the developing 6 TPO wide point of control at 2348.50, widening to 8 TPO’s by H period.

After trading lower in I and J, the market broke sharply again in K and L periods, looking below the prior day’s low at 2338.25. But with the combination of low volume (NYSE daily volume was under 2.98 billion), slowing pace, a weak L period high and a wide point of control above price failed to break out of the range and continue lower, and quickly short covered in the final 30 minute trading period almost all the way back to the magnetic point of control.

Depending on where price opens on Monday, Friday’s late rally high at 2347.25 could be an important early trading reference. Opening below and not violating the rally high could infer the late rally was just short covering and Friday’s prevailing down trend is still in tact, increasing the odds of a retest of the weekly low at 2331.75. If a breakout to the downside occurs potential lower targets are the unfilled gap from February 10 at 2312.75 and the emotional 2300.00 price level.

Price acceptance above the rally high and wide point of control from Friday could easily see price test Friday’s high at 2352.75 and attempt to repair the poor high from Wednesday at 2356.00, and Tuesday’s lower distribution high at 2357.25. Higher references include the single print at 2361.75 and the long string of excess single prints above the anomaly at 2364.50.

(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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Traders Await House of Representatives TrumpCare Vote

Early volatility, choppy, mechanical price action Thursday as traders await the outcome of the U.S. House of Representatives TrumpCare healthcare bill vote. Initially scheduled for Thursday evening the meeting was postponed, which prompted late selling when that announcement came out.

The market is in a three day balance between Tuesday’s selloff lower distribution high at 2357.25 and Wednesday’s low at 2332.25, which corresponds to near matching lows from February 16/17. If traders do not like the results of Friday’s House vote the potential exists of a downside breakout, potentially hitting stops below the balance low.

ES Balance Area

If a more serious breakout occurs, potential destination targets to the downside could include the unfilled gap from February 10 at 2312.75, and the emotional 2300.00 price level.

ES Daily Chart

If the market likes the vote results and breaks out higher from the balance it could fill in some of the many single prints from Tuesday’s upper range.

Other potential trade scenarios could see price look either above or below the balance and fail, return back into balance potentially targeting the opposite end, or remain in balance. The odds are probably lower that price remains in balance if the vote results are released during the U.S. pit session.

(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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ES Closes in Prior Day’s Lower Distribution After Selloff

The ES opened within the lower distribution of the previous day’s 1% selloff range, with the opening period high failing to trade above the prior close and overnight session high at 2342.00.

Price traded below Tuesday’s low and back up through it during the opening 30 minute period, and after trading lower again in B and C periods, price reentered the previous range, accelerating higher in C period and correcting the 100% short overnight inventory.

The early mechanical nature of trade Wednesday provided clues as to who was in control – the opening period (A period) high of the bar was exactly at the previous close/overnight high, the second period high (B period) was exactly at the prior low of day at 2338.00.

In C period, after the release of the crude oil inventory report, the market short covered through the B period high and reentered the previous day’s range, again trading exactly to the prior close/overnight high, leaving it an early poor high, then retraced and bounced exactly off the prior day’s low. The short covering continued in D period as price traded to within one tick of the point of control from Tuesday before reversing.

Price looked below the prior pit range low again in H period but was quickly rejected, rallying back to the wide point of control at 2340.75 which by then had developed to 6 TPO’s. Price tried to rally late in the final two periods but the point of control, now 9 TPO’s wide at 2341.25, kept price contained inside Tuesday’s lower distribution balance.

During Thursday’s pit session the point of control at 2341.25 could provide either support or resistance, depending on which side of it the market opens. Acceptance above the POC and Wednesday’s close could easily see price test Wednesday’s high at 2348.75. Acceptance above the high might then see price try to test Tuesday’s lower distribution high at 2357.25. If the market goes into short covering mode the next higher references are the single print from Tuesday at 2361.75 and excess single prints above.

Wednesday’s pit session was balanced, therefore balance trading rules could apply if price opens in range – look above or below balance and accelerate, look above/below and fail, or remain in balance in or near Wednesday’s range. Price acceptance below Wednesday’s low could potentially see price accelerate as the market has poor structure below. More serious selling could potentially see price try to test the top of an unfilled gap from February 13th at 2315.50, and the bottom of the gap (gap fill) at 2312.75.

If the market gaps open either higher or lower, monitor volume to see if price can reenter Wednesday’s range or continue in the direction of the gap.

(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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