Tag Archives: overnight halfback

Market Profile “B” Formation

Price opened within the previous day’s trading range in the S&P emini futures Tuesday, the A period high mechanically traded to just one tick below the prior days close, B period took out the A, but failed at one tick below the overnight halfback, the mechanical trade continued. Price was not acceptance above Monday’s close/prominent POC Tuesday.

market-profile-b-formation

The B period high reference, 2145.75, can be carried forward for future trading sessions as it can be considered to be a weak high – price reversing at such a visual short term trader’s reference. Visual short term traders references like this have good odds of being revisited either later the same day or in a future session.

A break in C period, selling off from the prior week’s high, filled Monday’s gap. There was heavy futures volume at the 2137.25 level. D formed inside bar, E looked above it, filling the A period single print and preventing the double distribution, but reversed at the session’s halfback level/previous low, more evidence of short term traders controlling price action and trading off of exact references. The remainder of the session chopped around in a balance, forming a wide point of control at 2138.75.

Wednesday’s profile has the classic “b” formation, implying the market was too long in the short term. Opening below and not finding acceptance back above Tuesday’s POC could easily see price test Tuesday’s low at 2135.25, acceptance below that level could target the multiple anomalies in the profile from Oct. 21st, along with that day’s low at 2123.25. There still remains the unrepaired poor low from Oct. 17th at 2117.75.

Opening below Tuesday’s point of control on Wednesday could see price gravitate back up to 2139, immediate resistance references above the POC include the prior weekly high at 2142.50, trading range high at 1143.25 and Tuesday’s high at 2145.75 – which can be considered a weak reference as it was just one tick below that session’s overnight halfback level. Above that is the weekly trend line, which if tested on Wednesday should be at the 2155 area.

(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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A Very Mechanical Day Trading in the ES

The market opened at the lower end of the previous day’s range on Thursday, looking briefly below Wednesday’s low then rallying back into its range, trading to and pulling back from very visual references and suggesting early that this day was being controlled by short and day time frame traders:

mechanical-trading-ES

– In A period, price traded higher exactly to the combined, visual references of the overnight session half back/single print from Wednesday at 2172.75, and pulled back exactly to the opening price before rallying again.

– In B period, price traded higher exactly to the wide point of control from the overnight session at 2174.75 (2 ticks shy of unchanged), then pulled back to just one tick above the current session’s half back level at 2171.50.

D period rallied higher but failed to gain acceptance above Wednesday’s late rally high and overnight high at 2176.00.

– E and F periods sold lower, but F bounced exactly off the floating half back level at 2172.50, more mechanical trading.

There are often good odds that very visual, mechanically traded levels like the F and earlier B period lows could be revisited, either during the same trading session or soon after. After balancing in G and H periods and forming an 8 wide point of control at 2173.75 the market broke lower, trading through the B & F references in I period but bounced from just one tick above the opening print. The mechanical trading continued.

The wide developing point of control at 2173.75 lowered the odds of price trading too far away from it. J,K and L periods all traded within just one tick of the A period low, making it a poor low on Thursday’s market profile chart, but could not get continuation below the earlier low.

For any meaningful continuation lower a second, lower distribution would probably have to develop and the developing point of control should migrate lower. Neither happened. Price balanced through M period, and the point of control failed to migrate lower. The market apparently short covered back to its POC at the end of the regular session.

Thursday ended as a balanced day, with a poor low and lower value. The market is now one timeframing lower for three consecutive days. Trading with acceptance above Thursday’s unchanged/POC level could target Thursday’s high. Failure to trade above 2177.25 keeps the one timeframing lower on the daily chart intact.

Acceptance below Thursday’s poor low could easily target the previous weekly low at 2165.25 and the bottom of the unfilled gap on the daily chart at 2163.50. There is also a very prominent naked point of control left from Aug. 4 at 2159.00.

(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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