No Continuation Lower After Break from Two Day Balance in ES

Market Profile balance trading rules applied on Wednesday as price opened within the lower end of the previous two day balance, traded below the low of the balance area in C period and accelerated, one time framing lower for five consecutive periods.

market-profile-chart

The move coincided with a sharp break in crude oil futures after the release of the EIA petroleum inventory report cited a decline in crude production.

After balancing in G and H periods the market reversed and short covered to close back into the previous day’s range, one timeframing higher from the low.

Wednesday’s late rally high at 2171.00 could be resistance on Thursday if price opens below that level. Acceptance above 2171.00 targets Wednesday’s poor high at 2172.75 and Tuesday’s unrepaired wide point of control at 2174.25, followed by the single print at 2177.00. Acceptance back into Tuesday’s upper distribution could then possibly target the poor high from Aug. 29 at 2182.25.

Potential destination trades to the downside, should price fail to find acceptance back above Wednesdays rally high, include Wednesday’s low at 2159.50, the prior week’s unrepaired poor low at 2157.50 and potentially the prominent point of control at 2153.25 from Aug. 3rd. There is also an unrepaired poor low at 2141.50 from Aug. 2nd.

Another possibility is for Thursday to be a low volume balancing trading session ahead of Friday’s monthly jobs report and the long US Labor Day weekend.

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