With overnight inventory virtually 100% short going into Friday’s pit session, the ES opened with a small gap lower (1 1/2 points), quickly filled the gap at the previous day’s low and pulled back to the Oct. 17th pit close at 2123.25 – which was also just one tick below the the overnight low and two ticks above the Oct. 17th prominent point of control, a very visual, mechanical short term trading level.
Very prominent, unrepaired points of control in the market profile often act as magnets for future trading sessions.
Friday’s pit trading session was a grinding, slow paced, low confidence session that traded off of very visual short term trader references, including:
- The low of the day was just one tick off a previous close/point of control
- The B period low was just one tick above the session open
- C period initially stalled at the 2131 overnight halfback level
- The I period pullback was from the then-current half back level
- The L period high of day stopped just one tick short of the previous day’s pit close
Because it was at such a mechanical level, Friday’s high at 2136.75 has good odds of being tested on Monday. Acceptance above that level could see price test the Oct. 20 high at 2141.25, the Oct. 19th 2142.50 poor high and the Oct. 14th 2143.25 high. Hitting stops above those similar price levels could potentially see price fill in some of the single prints left from the October 11th selloff, and even possibly fill the Columbus Day gap at 2156.25.
The ES is one timeframing lower on the daily chart for three consecutive day sessions. Failure to trade above 2136.75 keeps the one timeframing in tact.
Friday’s profile also left multiple anomalies. That information can be carried forward as anomalies are structural weaknesses often created by emotionally driven traders, such as short covering, and have good odds of being repaired in the next or future trading session after they were created.
To the downside, the B period low – one tick above Friday’s open – also has decent odds of being retested.
The unrepaired poor low still remains at 2117.75.
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