Market Profile commentary
Overnight inventory was 100% long coming into the regular trading session on Friday.
Mechanical buying off the overnight halfback price level in the opening period (overnight chart not shown), again off the open print in C period, and again off the overnight high at the low of E, signaled another day apparently being dominated by short term traders. Price continued to one tiemframe higher after the open for the entire session.
“Traders do what works until it doesn’t work anymore”. In this case buying off common, visual day time frame references and taking price to another new all time high.
The late day spike in L period at 2863.25 could be an early market profile reference on the next regular hours trading day, depending on where price opens after the weekend; acceptance within or above the spike shows the higher prices are being accepted, and could lead to a test of the all time high (2900 is now within striking distance). Opening/acceptance below the spike base could tell us that the late higher prices are being rejected.
If price finds acceptance back below 2863.25, the potential destination is the low of that balance at 2858.00, and possibly a test the single print at 2856.50. Acceptance back into the lower distribution could target the opposite end of that balance, Friday’s low.
The poor, mechanical structure of Friday’s profile makes the rally appear to be very questionable, probably leaving good odds that at least some of the anomalies from Friday’s chart will be revisited/repaired.
Note – at the time of this posting (Sunday evening) the overnight market had already traded to another new record high. While not guaranteed, all time highs that have been made in an overnight session have always been revisited during a regular day trading session. However, there have been overnight records highs in the past that had remained for a considerable amount of time before being retested in a daytime session.
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