Tag Archives: gaps

Short, Intermediate, and Long Term Time Frames Balancing on ES

Market Profile daily chart showing five day balance below 2398.00 all time high:

four day balance

All time frames are now balancing, as March ended as an inside month. The rally is tiring.

ES monthly chart

inside month April 2017 ES  Futures

Markets seldom go from bull market to bear, or from bear market to bull, there is often a balancing period in between. The weekly bar chart has been balancing for some time, with two gaps below current price:

ES weekly chart

ES weekly chart balancing

Monday’s regular hours session low at 2380.75 was very mechanically just one tick above the previous settle and one tick below the prior day’s prominent point of control. Exact levels like these have high odds of being revisited.

05-01-2017-split-view-profile

Price acceptance below Monday’s low targets the five day balance low and gap fill from April 24th at 2374.00. Acceptance into the April 24th bell curve, balanced profile targets the poor low from that day at 2365.75 and potentially the gap fill from April 21st.

gaps below price

There is not much excess on the all time high, and the psychological 2400 level has not been reached in the June contract. Price acceptance above the five day balance high at 2394.75 (April 26th poor high) targets the all time June contract high at 2398.00.

(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)

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ES – Pre Election Short Covering Rally

The market gapped open 30 points above its previous close on Monday, after an FBI release over the weekend said they have closed the investigation into US Presidential candidate Hillary Clinton’s email policies.

During the recent early November selloff, the market left poor structure leaving multiple poor highs and long stretched out profiles with multiple anomalies. Monday’s short covering rally repaired the poor structure from the November 1st selloff, filling the multiple single prints and repairing the anomalies from that day, and also repaired the poor high from October 31st at 2127.75. A poor high remains from 10/28 at 2135.25.

es-pre-election-short-covering-rally

An immediate Market Profile trading reference for Tuesday, depending on where price opens, is the base of the late day spike higher at 2025.00. Opening within or above the spike shows that higher prices are being accepted, and price should not immediately find acceptance back below 2125.00. Price acceptance above Monday’s high could target the prior poor high at 2135.25.

Opening below the spike base could imply that the late higher prices were rejected, and acceptance below Monday’s point of control could see price test the late pullback low at 2119.25.

This market had become very short since the FBI had reopened its investigation into the Clinton emails last week. During short covering, price does not respond as reliably around normal trading references, as traders that are caught short and are forced to cover have the “get me out at any cost” mentality.

Large gap higher openings like Monday’s can cause forcing action, where shorts in the market can receive margin calls after the large overnight move, forcing them to cover. Short covering weakens a market, as it also leaves poor profile structure in its wake.

Monday’s profile, while correcting previous poor structure in the market, also left poor structure in its profile. If price finds acceptance below 2119 the next downside market profile references are the single print at 2114.50, followed by Monday’s low at 2108.00, and the large gap below.

Gaps are a form of excess and can be envisioned as single prints. Price acceptance below Monday’s lowest anomaly would be trading in that excess.

(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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