The ES set yet another all time high Monday in the September emini futures contract at 2177.75, before the pit session opened.
The opening “A” period bar on the market profile chart opened just below of, and reversed off of, the wide point of control left from the previous day’s (regular session) profile, quickly selling 6 ES points lower before reversing and grinding its way through the previous day’s high (and previous S&P emini all time pit session high at 2171.75). After setting another new pit session all time high a few ticks higher at 2172.75, the ES reversed off of what was exactly the half back level from the overnight session.
When the market uses very visual, mechanical trading references like these it is a potential sign that short term and day traders are still in control, and these levels have good odds of being revisited either during the same trading session or soon after.
The selling at the D period half-back high was also apparently related to the simultaneous crude oil selloff, further evident of emotional shorter term traders looking for the easy trade.
Value ended the day to overlapping to lower, with a POC that was also creeping lower to settle 10 TPO’s wide at 2165.
All time highs made in the overnight trading session have good odds of being taken out, at some point, during regular trading hours. Does it have to happen, no, but history shows that even though overnight all time highs can remain for some time, they are not lasting.
On the downside, in addition to the poor low from July 28, there are near matching lows at July 19/July 27. Mechanical buying off very visual references (ie: previous lows) are usually fingerprints of short term traders and also have good odds of being repaired.
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