Thursday’s ES pit session opened inside of the upper distribution from the the prior pit session, and after chopping around in a small three point range in the first period, the second (B) period high matched the first (A) period high to the tick, making it a poor high, just below the prior late M period excess single prints.
Before breaking lower in B period, price breached Wednesday’s late pullback low at 2378.50 by three ticks. The overnight Globex low, 2378.25, was also just a tick below the pullback low.
The C bar low tested the B period low, trading to within one tick of it, making it a poor low before mechanically bouncing back to one tick below half back.
Split view Market Profile chart:
Price had breached the late pullback low, challenging the previous day’s uptrend, opening the door to potentially more downside continuation.
Although the A/B period high is poor, it is just a single data point. D period made a new low, accelerating lower to the low of Wednesday’s upper distribution at 2374.50 (to the tick) and quickly bounced. E period traded below the D bar low but was quickly rejected, with no acceptance back into the lower distribution, and a wide point of control began to develop at 2378. A later break in K/L periods was again rejected at the low, making another poor low, and price returned back to the wide point of control. The POC ended the session twelve TPO’s wide POC at 2378.25.
If price reenters a prior balance, in this case Wednesday’s lower distribution, the potential exists for price to trade to the opposite end of the balance (Wednesday’s low). Price never found acceptance back into Wednesday’s lower distribution on Thursday.
The current profile features both a poor high and a poor low, along with a wide point of control at 2378.25. With both short and intermediate time frames now balancing, Thursdays point of control at 2378.25 could provide either support or resistance on Friday, depending on which side of it the market opens. Price acceptance above the POC could easily see price retest and repair Thursdays poor high at 2384.50. Acceptance below the POC could pressure recent FOMC longs and retest Thursday’s poor low.
Acceptance back below Thursday’s low puts price back into Wednesdays lower distribution. When price reenters a prior balance the potential destination trade is the opposite end of the balance (Wednesday’s low at 2365.75). There is an unrepaired naked point of control from March 13th at 2361.25 that could act as a price magnet should the market get legs to the downside.
If price does break out of the one day balance to either side, the odds of continuation of the breakout should be greater if price first visits the very prominent point of control (fairest price) first.
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