Tag Archives: double distribution

Another Late Selloff, Market Profile Double Distribution

Very mechanical trading early on Tuesday, usually indicative of shorter term and day time frame traders controlling price.

Price could not reach the base of the late spike from Monday at 2650.50, but traded as high as 2648.75 before one time framing lower off the high. Value was clearly going to be lower following the previous day’s late selloff from the all time high.

double distribution selloff
Late selloff leaves double distribution in Market Profile chart, session closes near low.

After a choppy start when the market opened inside of and near the low of the previous day’s range, price bounced between the opening print and previous close in the first half hour period before trading higher to just a single tick above the single print from Monday’s profile at 2648.50, leaving a poor high with only one TPO of excess.

split view profile
Split view Market Profile chart for 12/5/17

The market balanced through I period, developing a wide point of control at 7 and 8 TPO’s at 2639.75 before the late selling in J period which formed the second, lower distribution beneath the earlier A/H bar’s poor low.

Looking at each of the distributions as a separate balance, potential balance trading scenarios could apply, depending on where the market opens:

– Look above or below a distribution and find acceptance at higher or lower prices
– Look above or below a distribution and fail to find acceptance, trading back into the balance and potentially targeting the opposite end
– Remain within balance

Price acceptance below Tuesday’s low could trigger further liquidation, potentially targeting the 2605 low from 12/1, and the prior weekly low at 2597.75.

Although maybe unlikely, if price recovers during the Globex overnight trading session and opens Wednesday inside the upper distribution from Tuesday, or finds acceptance back into the upper distribution, the poor high at 2648.75 and spike base from Monday at 2650.50 remain in play.

(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)




Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: 

Failed Breakout of Balance




A late afternoon press release on Monday stating North Korea had launched a ballistic missile over the northern Japanese island of Hokkaido that fell into the Pacific Ocean, possibly to demonstrate its capability of reaching the U.S. island territory of Guam, caused U.S. markets to open sharply lower on Tuesday.

failed breakout of balance

But following the 15.5 point gap opening lower the ES short covered back into the prior five day range, and traded back into Monday’s range. Price only stopped one timeframing higher in one period (H) and not again until until the final period, closing back near the high of the previous session.

The rally put price back near the center of the August range, again lowering the odds of the monthly one timeframing higher to come to an end by the end of this month, as all timeframes appear to be balancing and there is substantial excess at the all time high. The ES has been one timeframing higher on the monthly chart since the November 2016 Presidential election.

But if Tuesday’s move higher was mainly short covering (NYSE daily volume relatively low at only 2.73 billion), that could weaken the market. If the ES closes the month near the lower end of the August range, the odds are still high the monthly one timeframing could end in October.

Tuesday’s profile left two distributions. Price acceptance below the late pullback low at 2445.00 should attempt to repair some of the anomalies in the upper distribution, and potentially test the lower end of it at 2438.25

anomalies in market profile chart
(anomalies shaded in red)

Acceptance back below the single print separating the two distributions at 2436.00 could test Tuesday’s lower excess.

But Tuesday’s auction higher, after the gap opening lower, was a failed breakout of the five day balance to the downside. If price opens inside the upper distribution, the odds are probably good that Tuesday’s high will be retested, along with the Monday’s high at 2449.25.

Acceptance above that level first targets the five day balance high at 2454.00, potentially the upper distribution high from the 8/22 selloff profile at 2459.50, and the single prints above to the high from 8/17 at 2464.00.

The matching highs from 8/9 and 8/16 at 2474.00 could be within striking distance if the market rallies to find acceptance above 2464.00.

(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)




Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: 

ES Selloff Fills Two Gaps, Reverses Back to Near Unchanged

The ES made yet another new all time Globex session high at 2480.25 prior to Thursday’s regular trading session open, but sold off at the open after quickly trading one tick higher, setting the newest RTH record high at 2480.50. How long will this one last?

Selloff in ES fills two gaps
Selloff in ES fills two gaps

Price quickly reentered the prior two day balance, stalling at the very prominent point of control from Wednesday, and leaving an early poor A/B period low. First half hour NYSE trading volume was much higher at 506,245.

After revisiting the very prominent point of control from Wednesday at 2475.50, price traded above and below the two day balance high in 6 of the first 7 half hour periods, mechanically trading to a single tick below the open print in C, E and F periods before the sharp selloff in G accelerated through the two day balance low, and filled the gap from 7/24.

ES split view profile selloff from all time high
split view profile

When price reenters a prior balance area, the odds are good that it could trade to the opposite end of that balance. Selling continued in H and I periods, trading through the previous two day balance from 7/21 and 7/24, filling the gap from 7/18 at 2458.50 before finding a bottom at 2457.00.

New Money Selling?

The selloff in G period, following a sharp selloff in Nasdaq after a slew of earnings reports, occurred after price failed to trade back through the open price a tick above the matching C, E and F period highs. Very mechanical.

The selling also did not result in an outside day, as price closed back within Wednesday’s narrow range, and the 16 point bounce off the excess low suggests the move was short covering following liquidation from shorter term, emotional trading money, and probably not new longer term money. And although volume was higher, NYSE daily volume ended the day at 3.8 billion, not terribly high considering the distance price traded compared to prior sessions. Also, the DOW ended the day positive.

All that said, Friday morning before the bell is the release of the second-quarter GDP, which is expected to bring significant volatility.

Generally, after a large selloff, the odds are good that a new balance could develop within the selloff range. On Friday, depending on where price opens, early focus could be on the double distributions.

Thursday’s late rally high at 2473.00 is questionable, as it was exactly at the prior day’s close. It is also the high of the lower distribution. Because of the mechanical nature of the rally high, price could retest that level, trading back into the single prints between the two distributions. If price finds acceptance above the single print at 2475.70 and into the upper distribution, the target would potentially be a test of the all time high at 2480.50.

If the market fails to trade above 2475.75, or fails to find acceptance back into the upper distribution, Thursday’s lower excess single prints and the low at 2457.00 are the potential targets.

If the market doesn’t like the GDP numbers and sells off, multiple daily lows below 2457.00 could become potential targets, including the prior weekly low at 2448.00. The remaining unfilled gap from July (7/11) is at 2427.25.

(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)




Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: