The ES gapped open above the previous day’s poor high on Thursday and quickly sold off from a tick below the previous weekly high at 2142.50, accelerating lower into the previous pit session range.
The selling, which was on higher first half hour NYSE volume, left many excess single prints in the opening period, leaving a market profile selling tail. Higher than expected pending home sales had no effect as the selling intensified in B period, repairing all of Wednesday’s anomalies. B period also left a long string of excess single prints.
After balancing in C and D periods, the market rallied in E, filling in the B period excess single prints and closed the double distribution.
After becoming rotational and developing a wide point of control at 2132.00, the market one timeframed lower from J period into the close, accelerating lower in the final period and leaving a late day spike from 2126.50. Thursday’s pit session ended as an outside day.
With no clear direction from longer term money ahead of Friday’s GDP report, short term traders are controlling this range bound market, continually finding themselves too long and too short, and constantly correcting through liquidation breaks and short covering rallies.
The immediate market profile trading reference for Friday, depending on where the ES opens, could be the base of the late day spike at 2126.50. Did the late break trade low enough to cut off the selling, or will price need to search lower to find two sided trade? Friday’s 8:30 ET GDP report should provide early volatility and a possible direction for Friday’s trade.
If price opens above the spike, and finds acceptance above the point of control at 2132.00, the market could test the 2133.75 K period high – which was exactly at the previous close, and the E/F rally high at 2136.25 – which was exactly at the overnight half back level. Both very visual trading references used by short term and day traders, the weakest of hands.
If/when excess is removed it can signify change or the potential for change to take place. If the market can take out Thursday’s excess single prints and find acceptance above the previous week’s high at 2142.50 it could bring higher prices. As the end of the month draws near, the ES is one timeframing lower on the monthly chart. Price would have to trade above 2163.50 before the end of October to stop the one monthly timeframing.
To the downside, acceptance within or below the spike could easily test Thursday’s low at 2122.50, acceleration/acceptance below 2122.50 could make an attempt to repair the poor low from Oct. 17th at 2117.75, and potentially test the current multi day pit session trading range low at 2107.75.
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After a volatile premarket session following the U.S. Presidential Debate, the ES pit session opened within two ticks above its previous low, quickly accelerated lower to two ticks below the overnight low, and reversed back into and through the previous day’s trading range. Price was not accepted below Monday’s low.
The low at 2132.75 added another potential weak layer to the grouping of the similar lows from 9/19 – 9/21.
After a volatile first three periods the ES rallied in D period, one timeframing higher through I period before stopping exactly at the overnight session high at 2154.00.
Tuesday’s point of control migrated higher throughout the session with value developing overlapping to higher from the previous day.
Price was accepted above Monday’s high, briefly dipping back into the previous range in M period but reversed and rallied back to the high into the close.
The M period pullback low at 2148.75 could be an important short term trading reference on Wednesday. Acceptance below the single print at 2148.50 could see price rotate back through Tuesday’s lower distribution.
Acceptance above the 2148.75 late pullback low could easily test Tuesday’s high, which could be considered a weak high because it was also exactly at the overnight high. Acceleration and/or acceptance above 2154.00 could easily test the prior trading range high at 2158.00. There are also two naked points of control at 2162.50 and 2169.25.Share