Tag Archives: inside bar

Es – Look Below Six Day Balance, Short Cover Back Into Range

With overnight inventory 100% short below the previous close, an open-drive lower at the start of Thursday’s pit session left a string of excess single prints in the opening period. Selling accelerated in B period with price breaking below the low of the current 6 day balance at 2255.

Split view market profile chart:

With no early acceptance back into the previous day’s range and no immediate correction to the short overnight inventory, the ES one timeframed lower for the first four periods, but the early decline did not appear to bring in heavier selling volume and the point of control widened to 5 TPO’s wide at 2254, preventing downside continuation. NYSE daily volume was just 3.46 billion.

Price reentered the previous range and six day balance when the F period bar accelerated though the high of the less than three point inside bar in E period, short covering back through the earlier A/B period single prints. The market one timeframed higher for seven consecutive periods off the D period low.

The point of control migrated higher throughout the day, value finished the session overlapping to lower.

Depending on Friday’s open, the late pullback low at 2262.25 could provide short term support.

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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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Pre FOMC Day Market Profile Recap

With neutral overnight inventory coming into the session, the ES opened within the previous day’s range on Tuesday. After looking above Monday’s high in A period, B opened slightly below it, looked a tick above, and returned back into Monday’s range. After forming an inside in B period, C busted through it to the downside (5 minute drop in one minute) with no apparent news to cause the sudden spike lower other than being the day before FOMC.

C accelerated lower through Monday’s range repairing the poor low, D created a weak low at just one tick from matching the July 21st low at 2153.75

pre-FOMC-Day-volatility-ES-July-27-2016

D reentered the previous range – with E accelerating higher, initially pausing at just one tick below the previous close, once again defining that short term, emotional traders were controlling the market. The E period closed the lower distribution.

Volatility calmed down, forming a small inside bar in G period with a widening POC developing at 2161.50

A delayed breakout lower in H stayed within value and range from the previous day’s regular session, and the market traded within balance the remainder of the session.

Although price traded outside of the previous day’s range in C/D period it did not get the outside day, as price traded back into and closed within the previous day’s range.

The near matching lows from 7/21 and 7/26 can be considered weak because of the mechanical bounce from a visual level, and has good odds of being revisited in coming trading sessions.

There is still no resolution to the poor all time high at 2169.75 from 7/20.

You can probably expect heavy volatility Wednesday around the release of the FOMC Meeting Announcement 2:00 PM ET.

The ES is now in a nine day trading range after rocketing higher nearly 200 points off the June Brexit lows.

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