Tag Archives: balance

Three Day Balance

Three day balance in the ES

three-day-balance-es

Thursday’s pit session ended with overlapping to lower value, but closed back within the previous two day’s trading range. Depending on Friday’s open, potential trading scenarios could be:

– Look above or below balance and accelerate
– Look above or below balance and fail and return back into balance, potentially targeting the opposite end of the balance
– Stay within balance

There are three similar highs now that are within one point of each other. Accelerating through 2141.25 could potentially set off a “firecracker effect”, where price hitting one set of stops can accelerate higher, hitting more stops above the prior highs. Price acceptance above those highs should see price fill in some of the single prints left from the October 11th selloff, and possibly close the Columbus Day gap at 2156.25, or price could return back into the three day balance if higher prices are not accepted.

Thursday left a wide point of control at 2134.75. Acceptance below that level, or if price opens below the POC and can not gain acceptance above it, opens the possibility of price retesting Thursday’s low at 2126.75. Acceleration through that level could bring the very prominent point of control from October 17th at 2122.75 and possibly the unrepaired poor low at 2117.75 in play to the downside.

(the above post and all posts on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer

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ES 8 point trading range

The ES traded in just an 8 1/4 point range on Wednesday, leaving a very prominent point of control at 2155.00.

es-8-point-range

Market profile balance trading rules could apply if price opens within this range on Thursday – look either above or below balance and accelerate, look above or below balance and fail, or continue to balance. A breakout from either side should have better odds of continuation if price first trades to Wednesday’s wide POC, or fairest price.

Wednesday’s high at 2158.00 was just a tick below the previous session’s high at 2158.25. Weak, mechanical trading references have good odds of being tested in either the next or a future trading session.

Tuesday’s profile left a poor low at 2136.00. Trading below Tuesday’s low with acceptance could possibly bring lower references into play as noted in our previous post from Sept. 29th.

(the above post and every post on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer)

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ES Double Distribution

The ES opened within the previous day’s upper distribution Thursday, chopping around in just a 3 1/2 point range for the opening 30 minute period. Price tried to rally in B period, looked above the previous day’s high but immediately reentered the previous range. There was no price acceptance above the prior high.

open-in-upper-distribution

Trading was very mechanical early, including the selling from a tick below the opening print in D period leading to an initial test of Wednesday’s lower distribution. Price was rejected on that attempt and rallied back into the upper distribution above 2158, but failed at the 2163 previous close . The rout was on…

market-profile-split-view-double-distribution

The market broke in G period, reentering Wednesday’s lower distribution for a second time, accelerating lower through the entire distribution and taking out the prior low at 2144 before finding a bottom at 2137.25, 28 points off its high. The selloff started from just one tick above the previous day’s close, a very visual, mechanical level for short term and day timeframe traders.

Thursday’s value area, which had developed higher for the first half of the trading session, ended the day overlapping to lower. After forming a second, lower distribution, the point of control also dropped lower from an earlier 2161 to close the session at 2148.75.

es-double-distribution-selloff

Double Distribution

The 2153.75 late rally high in K period and single print at 2155.25, separating the two distributions, could be early trading references for Friday’s pit session. Each distribution can be viewed as a separate balance, with market profile balance rules applying – look above or below balance and accelerate, look above or below and fail and return within balance targeting the opposite side, or remain within balance.

If price exits one balance area and is accepted into another, the opposite end of that balance is the potential destination.

ES Daily Chart 9/29/16:

short-term-traders-dominate

There are now three daily highs from 9/23, 9/28 and 9/29 all within 4 ticks of one another. Exacting areas like these could suggest liquidation from short term traders rather than new money selling the market. Also, the market closed back within Wednesday’s range at 2148.75 and did not get outside day.

Below Thursday’s low at 2137.25, and more importantly the selling tail low from 9/27 at 2132.75, are a series of similar lows within two points of each other. If there are still many longer timeframe stops below those levels, selling into them could potentially set off a “firecracker effect”, where hitting one set of stops could set off another, driving price lower.

(the above post and every post on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer)

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