New All Time High at End of Quarter, Double Distribution

double distribution at new all time high
Double distribution following new all time high
Split view TPO profile chart of rally to new all time high, end of quarter window dressing

As a new month begins the ES has been one timeframing higher on the monthly chart since the 2016 November Presidential election, 10 consecutive months

Although the weekly one timeframing higher (4 consecutive weeks) was broken last week, it was an outside week to the upside as price traded below the prior weekly low, but closed above its high. An outside week is a sign of strength.

Combining the monthly one timeframing higher, the outside week, and the rally to another new all time high, the market ended September on a strong note. Was it just end of month window dressing, or will we see the beginning of a possible correction soon? Small daily ranges, low volume and no volatility could suggest the latter could be possible.

At the time of this posting the Globex market had already traded above Friday’s high, setting yet another new all time high. The overnight high (and low) are always important trading references for the following regular hour trading session. All time highs made in the overnight session have always been revisited during regular US hours, although they can remain untested for a considerable time.

Friday’s profile (9/29) was a double distribution. Treating each distribution as a separate balance, balance trading scenarios could apply – look above or below a balance and accelerate/find acceptance, look above/below balance and fail, or remain in balance.

If price re-enters a prior distribution, from either side, the potential destination is the opposite end.

Price acceptance below 2509.50, and back into the lower distribution from Friday, would have good odds of testing the low at 2504.75 and ending the daily one time framing higher (the ES has been one timeframing higher 4 consecutive days).

The low from 9/28, exactly at the psychological 2500 level, could also have good odds of being tested if further liquidation occurs below Friday’s low.

The next potential targets to the downside would be the close together lows from 9/26 (2492.25), 9/27 (2493.00) and the prominent naked point of control at 2491.25 from 9/25.

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