Tag Archives: overnight low

Balance Within Overnight Range

Large gaps are rarely filled the day after they are created. This held true on Wednesday after price opened near the top of Tuesday’s range, which had gapped open 11+ points above Monday’s range. Price was contained completely inside the overnight range, with the day’s low exactly at the overnight low and the high of the day just two ticks below the overnight session high.

S&P 500 emini overnight range
Overnight range

For the third consecutive day overnight inventory was close to 100% long going into the start of the regular session, setting up the possibility of a larger liquidation break in the near future. The overnight inventory is considered long if the majority of trade had occurred above the prior day session’s settle.

day session contained within overnight range
ES day session contained within overnight range

During the recent rally and breakout above the prior three week range, price rallied often from very visual price references, a sign of shorter timeframe traders in control, who can often easily give up their positions in the event of more serious liquidation.

Thursday’s balanced profile featured a very wide point of control at 2714.00, where all but one 30 minute market profile period had traded through. Depending on where price opens, that level could act as early support or resistance on Thursday.

Wednesday’s settle at 2709.75 was just above at the half-way mark between the January all time high and the February correction low at the 2708.00 level. Acceptance below Wednesday’s close could pressure recent longs and test the weak reference at Wednesday’s low, and potentially target the 2700 level and the top of the unfilled gap at 2692.50.

If the rally continues, visual references within striking distance to the upside include the botttom and top of the unfilled gap from 3/16 at 2745.25 and 2752.75, respectively.



(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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Mechanical, Slow Paced Trading Session in ES

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.

es-look-below-of-bbalance-and-fail

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.

(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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