ES Balanced Near Midpoint of July 27th Selloff Range

The ES balanced near the midpoint of the July 27th selloff range on Monday, in between the single print and upper distribution from that day at 2475.70 and the excess single prints above the prior week’s low at 2457.00.

ES balanced near midpoint of selloff range
ES balanced near midpoint of selloff range

The bulk of Monday’s trade took place in just about a 5 point range, with excess on both the top and the bottom of Monday’s profile leaving both a selling and a buying tail.

Looking at the entire 9 3/4 total point trading range as a balanced day, early acceptance above or below Monday’s very wide point of control at 2470.00 could give clues as to attempted market direction. When excess, which occurs in all time frames, is removed, the potential for change exists.

Trading above Monday’s high at 2475.00 retests the upper distribution from July 27th, acceptance back into that balance could easily test the all time high at 2480.50. While there is substantial excess on the weekly and monthly bars, there is only three ticks of excess at the all time high on the daily TPO chart.

Acceleration and/or acceptance with developing value below Monday’s low at 2465.25 brings Friday’s low at 2461.50 and the excess single prints from July 27th into focus, taking out that excess could also signal potential change.

A breakout from either side of Monday’s balance could have better odds of continuation if price first revisits the wide POC. Another possible scenario would see price remain in or around Monday’s balance on Tuesday, although probably unlikely because of the small range.

The July close at 2470.00 was well above its low at 2505.25, one timeframing higher for 8 consecutive months. With the daily bar balancing, the weekly bar is in it’s 5th consecutive week of one timeframing higher. Trading below 2457.00 would stop the weekly one timeframing higher, another potential 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. DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Please read our disclaimer)




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ES Selloff Fills Two Gaps, Reverses Back to Near Unchanged

The ES made yet another new all time Globex session high at 2480.25 prior to Thursday’s regular trading session open, but sold off at the open after quickly trading one tick higher, setting the newest RTH record high at 2480.50. How long will this one last?

Selloff in ES fills two gaps
Selloff in ES fills two gaps

Price quickly reentered the prior two day balance, stalling at the very prominent point of control from Wednesday, and leaving an early poor A/B period low. First half hour NYSE trading volume was much higher at 506,245.

After revisiting the very prominent point of control from Wednesday at 2475.50, price traded above and below the two day balance high in 6 of the first 7 half hour periods, mechanically trading to a single tick below the open print in C, E and F periods before the sharp selloff in G accelerated through the two day balance low, and filled the gap from 7/24.

ES split view profile selloff from all time high
split view profile

When price reenters a prior balance area, the odds are good that it could trade to the opposite end of that balance. Selling continued in H and I periods, trading through the previous two day balance from 7/21 and 7/24, filling the gap from 7/18 at 2458.50 before finding a bottom at 2457.00.

New Money Selling?

The selloff in G period, following a sharp selloff in Nasdaq after a slew of earnings reports, occurred after price failed to trade back through the open price a tick above the matching C, E and F period highs. Very mechanical.

The selling also did not result in an outside day, as price closed back within Wednesday’s narrow range, and the 16 point bounce off the excess low suggests the move was short covering following liquidation from shorter term, emotional trading money, and probably not new longer term money. And although volume was higher, NYSE daily volume ended the day at 3.8 billion, not terribly high considering the distance price traded compared to prior sessions. Also, the DOW ended the day positive.

All that said, Friday morning before the bell is the release of the second-quarter GDP, which is expected to bring significant volatility.

Generally, after a large selloff, the odds are good that a new balance could develop within the selloff range. On Friday, depending on where price opens, early focus could be on the double distributions.

Thursday’s late rally high at 2473.00 is questionable, as it was exactly at the prior day’s close. It is also the high of the lower distribution. Because of the mechanical nature of the rally high, price could retest that level, trading back into the single prints between the two distributions. If price finds acceptance above the single print at 2475.70 and into the upper distribution, the target would potentially be a test of the all time high at 2480.50.

If the market fails to trade above 2475.75, or fails to find acceptance back into the upper distribution, Thursday’s lower excess single prints and the low at 2457.00 are the potential targets.

If the market doesn’t like the GDP numbers and sells off, multiple daily lows below 2457.00 could become potential targets, including the prior weekly low at 2448.00. The remaining unfilled gap from July (7/11) is at 2427.25.

(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. DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Please read our disclaimer)




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Small Range, Two Day Balance at All Time High

two day balance at all time high
two day balance at all time high

The ES set another new all time record high at 2479.75 in the Globex session before the opening ell on Wednesday. The market then traded in just a 5 point range, and inside of the prior day’s small 6.25 point range, until a minor liquidation break in the final 30 minute period extended the range to the downside by one point,but failed to fill the 1st of three lower gaps in July at 2470.50.

Sometimes the market has to break before it can trade higher. Wednesday’s profile closed with another poor, mechanical high with no excess, and also as a weak high because it was just a single tick beneath the previous day’s high, which also had no excess. But with three gaps now in July, it appears that laggard momentum longs could be buying the market at the top but not getting any follow through.

If price opens within this range on Thursday, potential scenarios could either see price break out and accelerate above or below the two day balance, developing value and finding acceptance higher or lower, or look above or below the two day balance and fail, and at least initially targeting the opposite end of the balance. Because of the very small range, there are probably low odds of the market remaining within the current two day balance.

If price breaks out of the balance to the downside, probable destinations are the nearest lower gap fill at 2470.50 and previous two day balance from 7/21 and 7/24, potentially testing the top of the next lower gap and prior all time high at 2461.25. The gap fill from 7/18 would be at 2458.50.

(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. DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Please read our disclaimer)




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