FOMC Selloff, Double Disribution

The market gapped opened higher from Tuesday’s small range, inside day but sold off late after the release of the FOMC minutes where many Federal Reserve policymakers said it might be appropriate to raise interest rates again “fairly soon”, if inflation and jobs data comes in line with expectations.

FOMC selloff

Tuesday’s Market Profile chart featured a double distribution. Failing to find acceptance back above the high of the lower distribution at 2354.25 would imply that nothing has changed in regards to the late selloff down trend.

If price is accepted above the lower distribution and trades back into the L period single prints, potential resistance is at the single print at 2360.75 at the lower end of the upper distribution. Acceptance back into the upper balance could target the wide point of control at 2370.75 and poor high at 2375.00.

If the selling pressure continues into Thursday’s pit session and price finds acceptance below Tuesday’s low at 2344.25, potential targets to the down side are the April 3rd low at 2340.00 and March 28 low at 2333.50. If the previous support area at the prior multi-day trading range lows and March 27th single print below 2332.00 is breached, the all important 2318.00 March low comes into focus. Trading below 2318.00 would stop the one timeframing higher on the monthly chart, a more significant sign of change.

(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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Market Sells Off From Inside Day, Short Covers Into Close

The ES opened near the lower end of Friday’s small range, inside day on the first trading day in April, immediately testing Friday’s low to within a tick at 2358. But after a low confidence, less than 4 point opening period price accelerated lower through the low.

Monday’s early selloff appeared to be a liquidation break from shorter term traders rather than from longer term money selling, evident by the short covering rally into the close.

Short term traders in control

An early bounce in B period off its low at 2352.75 up to 2357.75 went back exactly to Friday’s low, and the selling resumed from the C period high at 2358.00, just one tick above that level, a very obvious short term traders’reference.

Although price sold off sharply, accelerating through two consecutive daily lows and into the March 28th lower distribution, Monday’s low at 2340.00 was not re-tested, and a wide point of control began to develop at 2348.00, turning 8 wide by K period.

Depending on where price opens on Tuesday, Monday’s rally high at 2357.70 could be an important early reference. Opening and finding acceptance above 2357.50 nullifies Monday’s early downtrend, and price could gravitate back to the prominent back-to-back points of control at 2362.25/.50 and on its way to repairing the back-to-back poor daily highs at 2366.75, also the prior weekly high. Opening and finding acceptance below 2357.50 keeps Monday’s early downtrend intact.

The market has stopped one timeframing higher on the daily chart, and is still one timeframing lower on the weekly. Monday’s point of control at 2348.00 did not migrate higher with the late rally. If price opens below Monday’s close, early focus could be on price acceptance either above or below the point of control, and developing value.

Failure for price to find acceptance above Monday’s POC should see a test Monday’s excess single print buying tail at the low. A breach of 2340.00 could re-test the March 28th lower distribution/balance low at 2338.50 and the prior support level at 2332. If there is more serious selling below prior support, more extreme levels price levels could come into play including last week’s low at 2318.00 and the unfilled gap from February at 2312.75.

(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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Balanced, Inside Day on Last Trading Day of Month, Quarter

Balanced, inside day on the last trading day in the month and quarter on Friday. Price failed to trade below the previous day’s excess single prints at 2358.50 until the final half hour period.

Friday’s high at 2366.75, also the weekly high, was exactly at the prior day’s poor high (no excess TPO’s).

poor and weak high on market profile chart

Depending on where price opens on Monday, balance trading rules could apply: look above or below the one day balance and accelerate or fail, or remain balancing.

One potential “look above and fail” day trading scenario could see price repair the back to back poor/weak highs at 2366.75 and fail, returning back into the two day balance to test Friday’s low at 2357.75. Acceptance below that level would stop the one timeframing higher on the daily chart and would probably test Thursday’s 2354.00 low.

Lower potential price targets, should selling intensify, are the March 29th low at 2348.75, March 28th single print at 2342.75 and single print and prior trading range low at 2131.50.

If/when the market finds acceptance below the 2332 prior support level and if there is more serious selling pressure, more extreme levels could include the March 28th low at 2318.00 and unfilled gap (eventually) from February at 2312.75.

To the upside, acceptance above Friday’s poor high keeps the short term uptrend intact and would stop the one timeframing lower on the weekly chart, potentially targeting the remaining single prints and 2378.75 high from March the 21st selloff, and 3 daily highs above that level, including the March 16th poor high at 2384.50, which was mechanically at the upper excess level from the March 15th recovery high.

The all time S&P 500 Emini high on the March contract is at 2398.50. It is also a “poor” high.

(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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