Tag Archives: balance

ES Selloff GAP Filled – Potential Island Reversal, or Continuation of One Time Framing Higher to New All Time Highs?

Short term traders dominate the market

es-daily-chart-december-contract

Just an 8 1/2 point trading range in the ES Thursday after a gap opening higher from the prior day’s range created from the September 9th selloff. Price grinded higher to reach just two ticks from the unrepaired very prominent point of control from September 8th and closed the gap, trading through 2169.25

possible-island-reversal-es

Balance trading rules could apply on Friday, depending on where the market opens:

– Look above or below balance and accelerate
– Look above or below balance and fail, returning back into the balance, initially targeting the opposite end of the balance
– Remain within balance

Although very mechanical, the market is still one timeframing higher on the daily chart. Potential targets above Thursday’s high include the poor high at 2179.75 from September 7th and the August 23rd all time ES high on the December contract at 2184.50, which was also a poor high with only one tick of excess.

Potential destination trades below Thursday’s poor low at 2164.25 could include the high from Wednesday, September 21st and close at 2157.50/2156.25, followed by the 2152.50 anomaly/single print, and 2147.75 single print.

(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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Value ended overlapping to higher but closed with weak, poor low

Although value was overlapping to higher for Wednesday’s U.S. pit session, the ES broke lower in I period after a failed breakout attempt higher from H period’s small balanced inside bar and one timeframed lower for the final 4 periods into the close. The ES closed two ticks above the previous day’s low.

weak-and-poor-low

Wednesday’s profile ended with a weak and poor low at 2112.00, weak because it is only one tick below the previous day’s pit session low, and poor because of just one tick of excess in the final periods. Weak and poor lows are usually repaired in future trading sessions.

There is the possibility of a gap lower opening on Thursday, but if price opens within Wednesday’s range and can’t find acceptance above the point of control at 2125.50, the low at 2112 has good odds of at least being tested. Acceleration below Wednesday’s low could bring in more selling, first testing Monday’s low at 2110.50. Acceptance below that low could see price repairing more of the poor profile structure from July 8th and testing the previous June relief rally high at 2103.50. There is also an unfilled gap at 2095.00 from July 7th.

If price repairs Wednesday’s poor low and returns back into its range, monitor price for acceptance or rejection, and one timeframing for continuation or balance.

(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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A Very Mechanical Day Trading in the ES

The market opened at the lower end of the previous day’s range on Thursday, looking briefly below Wednesday’s low then rallying back into its range, trading to and pulling back from very visual references and suggesting early that this day was being controlled by short and day time frame traders:

mechanical-trading-ES

– In A period, price traded higher exactly to the combined, visual references of the overnight session half back/single print from Wednesday at 2172.75, and pulled back exactly to the opening price before rallying again.

– In B period, price traded higher exactly to the wide point of control from the overnight session at 2174.75 (2 ticks shy of unchanged), then pulled back to just one tick above the current session’s half back level at 2171.50.

D period rallied higher but failed to gain acceptance above Wednesday’s late rally high and overnight high at 2176.00.

– E and F periods sold lower, but F bounced exactly off the floating half back level at 2172.50, more mechanical trading.

There are often good odds that very visual, mechanically traded levels like the F and earlier B period lows could be revisited, either during the same trading session or soon after. After balancing in G and H periods and forming an 8 wide point of control at 2173.75 the market broke lower, trading through the B & F references in I period but bounced from just one tick above the opening print. The mechanical trading continued.

The wide developing point of control at 2173.75 lowered the odds of price trading too far away from it. J,K and L periods all traded within just one tick of the A period low, making it a poor low on Thursday’s market profile chart, but could not get continuation below the earlier low.

For any meaningful continuation lower a second, lower distribution would probably have to develop and the developing point of control should migrate lower. Neither happened. Price balanced through M period, and the point of control failed to migrate lower. The market apparently short covered back to its POC at the end of the regular session.

Thursday ended as a balanced day, with a poor low and lower value. The market is now one timeframing lower for three consecutive days. Trading with acceptance above Thursday’s unchanged/POC level could target Thursday’s high. Failure to trade above 2177.25 keeps the one timeframing lower on the daily chart intact.

Acceptance below Thursday’s poor low could easily target the previous weekly low at 2165.25 and the bottom of the unfilled gap on the daily chart at 2163.50. There is also a very prominent naked point of control left from Aug. 4 at 2159.00.

(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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