Category Archives: S&P 500 E-mini Market Profile Review

ES Back to Center of Extended Trading Range

ES-back-to-center-of-exttended-trading-range

Another small range, balanced trading day in the S&P emini Thursday ahead of the monthy jobs report with price trading back to the center of the prior multi day extended trading range. Thursday’s profile left another wide POC, or “fairest price, at 2159.

The September futures contract all time high at 2177.75 was made in the extended hours Globex session, and there is a poor low from August 2 and three unfilled gaps below the market.

With short term traders apparently dominating the market it would not be surprising to see the Globex high taken out, followed by selling back into the multi day trading range.

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Narrow Range, Inside Day

Narrow range, balanced inside day in the ES with price trading above and below the 2153 prior day’s late rally high and closing price in 11 of the 13 market profile periods.

inside-day-above-prior-rally-high

There was just over a 6 point total range for the day until the final minutes of the pit trading session, when price rallied from the K period pullback low (the exact half back level at the time) to take out the day’s earlier 3 TPO wide poor high by two points.

poor-high-repaired

The 11 TPO wide prominent point of control keeps 2153.25 an important reference. If price opens within range, any breakout from the inside day should have better odds of continuation if price first checks in with the wide POC. But with such a small trading range there are also good odds that price opens with a gap the next regular trading session.

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Breakout of Balance or Just A Liquidation Break?

Early in the opening “A” period on the Market Profile chart Tuesday, price tried to again rally exactly off of the previous day’s low at 2159.75, but failed exactly at the overnight half back at 2164 (indications of more short term traders buying and selling off of exacting price references?) and reversed back through Monday’s low.

Momentum traders piled on, one time framing lower for the first 8 market profile periods repairing the poor low from July 28 and the matching daily lows from July 19 and 27.

breakout-of-balance-s&p-emini

After leaving many single prints from the A and B periods selloff the market tried to balance, printing two inside bars in D and E periods, and developed a 5 wide POC by G period at 2147.75.

Still one time framing lower the market traded below that balance, leaving a poor low at 2141.50, short of filling the first of three gaps below the market at 2136.75.

Probable short covering began in J period with the market one timeframing higher for the remainder of the session, but price could not get back to the day’s half back level and closed the session at 2153, the late day rally high.

There is only 4 ticks of excess on the monthly bar at the all time highs. In addition, the latest all time high now at 2177.75 was made in the extended hours trading session.

At just 3.8 billion, NYSE volume was not particularly high in comparison with the size of Tuesday’s move down.

Focusing on Wednesday, IF price opens within the lower distribution from Tuesday’s profile, will price attempt to trade with acceptance back above the late day rally high at 2153 and fill in some of Tuesday’s A/B single prints (and reenter the multi-day trading range), or will selling pressure continue and pull price back down in attempt to repair the 2141.50 poor low, and the unfilled gap from July 11? Another possibility would be for the market to stay in balance with Tuesday’s lower distribution.

There was no continuation late with Tuesday’s selloff. If more serious money was selling price probably shouldn’t have reversed so much off the lows, and NYSE volume should probably have been higher. But if Tuesdays selloff was a true breakout to the downside and not a liquidation break from shorter term traders, will Wednesday open with a gap lower? If it does, monitor if price gets accepted or rejected back within Tuesday’s lower balance.

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