Tag Archives: poor high

FED Day – FOMC Minutes Leaves Multiple Market Profile Anomalies

Fed-Day-multiple-anomalies-market-profile

Following Tuesday’s pre-FOMC Day, gap open lower and small seven point trading range (Tuesday ended the pit session as a near perfect bell shaped profile curve, but with both a poor high and a poor low), the ES opened Wednesday’s pit session at the lower end of Tuesday’s tight balance and quickly traded lower, taking out the three almost identical “weak” lows from Aug. 11, 12 and 16th.

D period eventually repaired the poor low from Aug. 10th but price failed to trade down to close the gap at 2163.50 left unfilled from Aug. 4th.

Wednesday’s profile left multiple anomalies. Some, or all, anomalies in stretched out profiles are often repaired in future trading sessions soon after.

Currently, there is excess on the all time high at 2190.75 on the daily, weekly and monthly bar charts. There is no excess on the market profile pit session chart because it is a “poor high” at three TPO’s wide. Poor all time highs can last for sustained periods of time but history has shown they are eventually repaired.

While the monthly bar chart has resumed one timeframing higher the weekly and daily bars have not. An immediate short term market profile reference for Thursday could be Wednesday’s poor high at 2181 (which was also the exact overnight high). If taken out, one timeframing on the daily chart will have stopped. If not, some or all of Wednesday’s anomalies could be repaired and price could possibly test Wednesday’s low.

Potential targets above Wednesday’s high include Tuesday’s poor high, the unfilled gap from Aug. 15 at 2184.50, and the all time high.

It would also not be uncommon for the market to trade above the previous day’s high, temporarily ending the one timeframing lower and allowing short term inventory to balance, then trade back into the previous day’s range and continue one timeframing lower.

(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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Pre FOMC Day Market Profile Recap

With neutral overnight inventory coming into the session, the ES opened within the previous day’s range on Tuesday. After looking above Monday’s high in A period, B opened slightly below it, looked a tick above, and returned back into Monday’s range. After forming an inside in B period, C busted through it to the downside (5 minute drop in one minute) with no apparent news to cause the sudden spike lower other than being the day before FOMC.

C accelerated lower through Monday’s range repairing the poor low, D created a weak low at just one tick from matching the July 21st low at 2153.75

pre-FOMC-Day-volatility-ES-July-27-2016

D reentered the previous range – with E accelerating higher, initially pausing at just one tick below the previous close, once again defining that short term, emotional traders were controlling the market. The E period closed the lower distribution.

Volatility calmed down, forming a small inside bar in G period with a widening POC developing at 2161.50

A delayed breakout lower in H stayed within value and range from the previous day’s regular session, and the market traded within balance the remainder of the session.

Although price traded outside of the previous day’s range in C/D period it did not get the outside day, as price traded back into and closed within the previous day’s range.

The near matching lows from 7/21 and 7/26 can be considered weak because of the mechanical bounce from a visual level, and has good odds of being revisited in coming trading sessions.

There is still no resolution to the poor all time high at 2169.75 from 7/20.

You can probably expect heavy volatility Wednesday around the release of the FOMC Meeting Announcement 2:00 PM ET.

The ES is now in a nine day trading range after rocketing higher nearly 200 points off the June Brexit lows.

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