Tag Archives: Inside day

Balanced, Inside Day – Price Fills in Excess Between Distributions

market profile chart 04212017

With overnight inventory nearly 100% long, the ES opened a tick above unchanged on Friday but could not trade above the prior day’s point of control. The prior day late pullback low at 2351.50 offered no early support as price sold through the low of the upper distribution.

The low confidence, choppy opening continued in B period, with price testing the 2351.50 pullback low from below, to the tick, before printing a poor A/B low and closing as a small, three point inside, balanced bar.

split view market profile chart

Price couldn’t find any real acceptance back inside either distribution from the prior day, with Friday’s C and E period highs failing at the upper distribution low and the D period low bouncing from exactly at the high of Thursday’s lower distribution.

Friday’s regular session closed as another inside day, filling in the excess single prints between Thursday’s upper and lower distribution.

Entering the last trading week of the month, March is still printing as an inside month


The weekly chart is balancing, and was also an inside week

ES Weekly Chart

The daily chart is balancing, although one timefaming higher for five consecutive days

ES Daily Chart

Balance trading rules could apply in regards to the inside day, and also the inside week – look above or below the high/low and find acceptance, look above or below and fail – returning back into the balance targeting the opposite end (at minimum), or remain balanced (probably the lowest of odds). The longer a market remains within a balance the greater the odds are that a significant breakout will occur.

A potentially important early reference for Monday could be the very prominent point of control at 2347.00 from Friday’s inside day. Not finding acceptance back above the point of control and session close at 2347.25 could easily see price test Friday’s low at 2340.50, stopping the ontimeframing higher on the daily chart.

To the downside, acceleration below 2340.50 could easily see sellers test the April 20th low at 2337.25, finding acceptance below that level would bring the group of three daily lows at 2331.00, 2330.25 and 2328.75 (weekly low) into play, setting up another potential “firecracker effect” (a popular term coined by James Dalton), where hitting one set of stops triggers the stops below nearby price levels.

Taking out the prior weekly low (inside, balanced week) at 2328.75 could trigger further selling as there are now three weekly lows closely grouped together – 2328.75, 2324.00, and 2318.00 (also the March low). Trading below 2318.000 would stop the onetimeframing higher on the monthly chart and could result in a more serious change. More serious selling could bring the unfilled gap at 2312.75 from February into focus.

Although the odds for a downside breakout appear to be good, the market is in a tight balance nearing the end of the month. To the upside, if price finds acceptance above 2347.00 and can break out with continuation above Friday’s high, buyers could target the April 20th weekly high at 2358.25. A breakout of either side of the inside week (balance) could see either price acceleration higher/lower, or a look above/below and fail.

(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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Early volatility, choppy trade closes as another inside day


The Opening 30 Minute Period

With overnight inventory near 100% short, the ES opened below the base of the late day spike from the previous low volume session, quickly traded to the POC at the open sold through the low of the successive, near matching 30 minute one timeframing bars from Monday. Price Traded through the selling ledge at 2335.50 by two ticks, but not finding momentum buyers or stops, sharply reversed from two ticks above the overnight low.

Price rallied back into Monday’s spike, correcting most of the short overnight inventory, but failed to get to unchanged.


The Second Period

The first period rally left a long line of single prints, 9 points. Single prints of that length are every rarely ever left at least partially unfilled. After opening at the high of A period and leaving a poor A/B high on the market profile chart, Tuesday’s second (B) period retraced most of the excess single prints, bouncing mechanically and exactly off the opening price at 2336.75,

After the volatility subsided, C period printed as a small, three point inside bar. Erratic price action followed in D period as price looked both below (bouncing off the open price again) and above the high of C, but not finding acceptance back into Monday’s spike. The developing point of control turned 5 wide by E period. Developing value was at overlapping to higher.

E period opened and broke sharply lower, selling through the earlier weak B and D bar lows (at the open), taking out the A period initial balance low, and eventually trading through Monday’s weak C bar low reference.

Generally, the wider the developing point of control becomes the harder it is for price to move away from. Tuesday, a double distribution would probably have been needed to see more substantial continuation lower in price after the E period break, But with lack of volume and participation from larger timeframe players price short covered back into the opening range.

Tuesday’s regular hours session ended as another inside day, value was also inside of Monday’s value.

If the market opens within range on Wednesday, balance trading rules could apply in regards to the inside day. Potential day trading strategies could see price:

– Look above Tuesday’s poor high and accelerate higher, taking out Monday’s high at 2346.00, targeting the poor high from 4/11 and the prior weekly high.
– Look above Tuesday’s high, test Monday’s high and fail, and return back into balance. The destination trade would become Tuesday’s low and potentially beyond the three day balance, including potentially testing the prior weekly low at 2324.00, and trading lower to the 2318 March low.
– Look below Tuesday’s low and accelerate through Monday’s low and into the late day spike from 4/13, eventually testing the prior weekly low at 2324.00, potentially the monthly low at 2318.00
– Look below Tuesday’s low, test Monday’s low and fail, returning back into the range and targeting the opposite end.
– Stay in balance.

An important early Market Profile reference for Wednesday could be the prominent, 11 TPO wide point of control at 2337.75. If the market opens within range, a breakout to either side of the range would probably have better odds of continuation if price first tests the wide POC.

(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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