Tag Archives: poor low

Double Distribution Trading Day

After grinding its way higher to take out the latest Globex all time high by two ticks before one timeframing lower for 6 periods on Tuesday, Wednesday’s ES pit session opened slightly above Tuesday’s close and chopped around in a 5 point range for three periods before breaking to the downside in D period, forming a double distribution and filling in some of the excess single prints from August 5th.

market-profile-double-distribution

Both value and the point of control migrated lower during Wednesday’s session.

So was Tuesday’s grind higher to take out the Globex session all time high and establishing a new pit session all time high “game over, side out” for the market participants who drove price up there? Will this latest new all time high be lasting, at least for a while? Only time will tell.

For Thursday’s U.S. trading session, market profile traders will want to monitor for price acceptance or rejection around the two distributions from Wednesday, and poor low at 2167.75.

Acceptance below the lower distribution could target the unfilled gap and prominent point of control from the August 4th profile. Trading with acceptance back into the upper distribution targets Wednesday’s high and could challenge the all time high from Tuesday.

(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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More New All Time Highs

The ES set yet another all time high Monday in the September emini futures contract at 2177.75, before the pit session opened.

Another-new-S&P-500-all-time-high

The opening “A” period bar on the market profile chart opened just below of, and reversed off of, the wide point of control left from the previous day’s (regular session) profile, quickly selling 6 ES points lower before reversing and grinding its way through the previous day’s high (and previous S&P emini all time pit session high at 2171.75). After setting another new pit session all time high a few ticks higher at 2172.75, the ES reversed off of what was exactly the half back level from the overnight session.

When the market uses very visual, mechanical trading references like these it is a potential sign that short term and day traders are still in control, and these levels have good odds of being revisited either during the same trading session or soon after.

The selling at the D period half-back high was also apparently related to the simultaneous crude oil selloff, further evident of emotional shorter term traders looking for the easy trade.

Value ended the day to overlapping to lower, with a POC that was also creeping lower to settle 10 TPO’s wide at 2165.

All time highs made in the overnight trading session have good odds of being taken out, at some point, during regular trading hours. Does it have to happen, no, but history shows that even though overnight all time highs can remain for some time, they are not lasting.

On the downside, in addition to the poor low from July 28, there are near matching lows at July 19/July 27. Mechanical buying off very visual references (ie: previous lows) are usually fingerprints of short term traders and also have good odds of being repaired.

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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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