Tag Archives: breakout of balance

Breakout of Balance




After the market’s failed breakout attempt of the five day balance to the downside on Tuesday, one scenario was for the market to break out and find acceptance above the five day balance high at 2454.00 on Wednesday. Potential targets were the upper distribution high from the 8/17 selloff profile at 2459.50, and the single prints above to the high from that day at 2464.00. Wednesday’s high was at 2459.75, a poor high with no excess.

breakout of balance
After a failed breakout of the 5 day balance to the downside a day before, the market broke out to the upside the next.

If price opens above 2454.00 on Thursday (the prior 5 day balance high) the higher price levels noted in Tuesday’s market profile report could still be relevant.

Acceptance above 2459.75 and back into the excess single prints from the 8/17 selling tail could first target the high from 8/17 at 2464.00, and the wide point of control at 2467.75 and remaining unrepaired anomalies from the 8/16 profile. The matching highs from 8/9 and 8/16 at 2474.00 are within striking distance if the market finds acceptance above 2464.00.

Wednesday’s late pullback low at 2453.00 could be an important early reference on Thursday, depending on where price opens. Generally, the prior balance high (2454.00) should be support if the market broke out higher on strength. If Wednesday’s pullback low at 2453.00 fails to hold and price is accepted below that level, it puts price back into the five day balance, questioning the last two day, low volume rally (NYSE daily volume was very light at 2.51 billion).

split view profile breakout of balance

Potential lower targets are the single print at 2449.50, previous resistance, acceptance below that level probably tests Wednesday’s excess buying tail. Tuesday’s lower distribution high at 2436.00 comes into focus below Wednesday’s low.

End of month options expiration should bring volatility.

(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. DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Please read our disclaimer)




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ES Gaps Open Higher Following Macron’s First Round French Presidential Election Win. New Trading Range or Island Reversal?

The ES gapped open higher over 24 points on Monday, breaking out of Friday’s inside day and the prior inside week before the Market opened. Sunday’s Globex session open, at 2365.75, was 18 1/2 points above Friday’s 2347.25 pit session close.

After the US market opened, the day’s opportunities were confined to just an 8 1/4 point, low confidence, slow paced trading session that failed to even trade to either the overnight low or high (Globex range = 11.5 points).

US pit session Market Profile chart

island reversal or new trading range

Potential balance trading scenarios could apply for Tuesday’s regular trading session, depending on where price is at the open:

  • look above Monday’s high, repair the poor high from April 5th at 2375.00 and continue higher on a potential quest for a new all time high.
  • look above Monday’s high and fail, potential destination target at Monday’s poor low.
  • look below Monday’s poor low and accelerate, finding acceptance and attempt to fill the prior week’s gap.
  • look below Monday’s low, repairing the poor low, and return back into balance potentially targeting Monday’s high.
  • Remain in balance. It is not unusual for price to form a new trading range after a large gap open to begin a new week, as large gaps are rarely filled on the day or the day after they’re created.
  • (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. DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Please read our disclaimer)

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Calm before the upcoming Brexit Storm?

twelve-point-S&P-trading-range-within-overnight-session

Early trade Tuesday in ‘A’ period (the first half hour trading period on the above S&P chart) stopped exactly at the base of the spike from Monday, which also coincided with the overnight high and overnight session’s half-back level, very mechanical day and short term traders references. Price sold from there down to just a tick below the overnight session low, another very mechanical, visual trader’s reference.

Tuesday’s trading day was contained within the 12 point overnight range from Monday, forming a very prominent point of control at 2079.50. It is also another inside day, trading completely within the previous day’s range.

Being another inside day, possible trade scenarios (again, barring another gap open) for the next trading session would be for price to look outside of either end of balance and accelerate, or look outside and fail, returning within the balance. If look outside of balance and fails the destination trade is the opposite end of the balance, and potentially beyond. Any breakout of balance should have better odds of follow through if price first visits the very wide point of control from Tuesday at 2079.50 and then reverses.

There is also the possibility of price staying within balance, but with the upcoming Brexit vote that might be the lowest odds of the scenarios. Existing Home Sales and Federal Reserve Chair Janet Yellen’s semi-annual testimony before the House Financial Services Committee are also scheduled for 10:00 AM EST Wednesday, followed by the EIA Petroleum Status Report at 10:30 AM EST, each of which could cause volatility.

Calm before the brexit storm?

On Thursday, June 23 The United Kingdom will decide whether the U.K. will remain a part of the European Union. Polling results will be reported throughout Thursday’s U.S. trading day, with the official announcement expected to be released early Friday morning, June 24th.

Significant market activity is expected for later this week resulting from the Brexit vote.

More information on the upcoming Brexit referendum can be read here.

(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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