The Opening 30 Minute Period
With overnight inventory near 100% short, the ES opened below the base of the late day spike from the previous low volume session, quickly traded to the POC at the open sold through the low of the successive, near matching 30 minute one timeframing bars from Monday. Price Traded through the selling ledge at 2335.50 by two ticks, but not finding momentum buyers or stops, sharply reversed from two ticks above the overnight low.
Price rallied back into Monday’s spike, correcting most of the short overnight inventory, but failed to get to unchanged.
The Second Period
The first period rally left a long line of single prints, 9 points. Single prints of that length are every rarely ever left at least partially unfilled. After opening at the high of A period and leaving a poor A/B high on the market profile chart, Tuesday’s second (B) period retraced most of the excess single prints, bouncing mechanically and exactly off the opening price at 2336.75,
After the volatility subsided, C period printed as a small, three point inside bar. Erratic price action followed in D period as price looked both below (bouncing off the open price again) and above the high of C, but not finding acceptance back into Monday’s spike. The developing point of control turned 5 wide by E period. Developing value was at overlapping to higher.
E period opened and broke sharply lower, selling through the earlier weak B and D bar lows (at the open), taking out the A period initial balance low, and eventually trading through Monday’s weak C bar low reference.
Generally, the wider the developing point of control becomes the harder it is for price to move away from. Tuesday, a double distribution would probably have been needed to see more substantial continuation lower in price after the E period break, But with lack of volume and participation from larger timeframe players price short covered back into the opening range.
Tuesday’s regular hours session ended as another inside day, value was also inside of Monday’s value.
If the market opens within range on Wednesday, balance trading rules could apply in regards to the inside day. Potential day trading strategies could see price:
– Look above Tuesday’s poor high and accelerate higher, taking out Monday’s high at 2346.00, targeting the poor high from 4/11 and the prior weekly high.
– Look above Tuesday’s high, test Monday’s high and fail, and return back into balance. The destination trade would become Tuesday’s low and potentially beyond the three day balance, including potentially testing the prior weekly low at 2324.00, and trading lower to the 2318 March low.
– Look below Tuesday’s low and accelerate through Monday’s low and into the late day spike from 4/13, eventually testing the prior weekly low at 2324.00, potentially the monthly low at 2318.00
– Look below Tuesday’s low, test Monday’s low and fail, returning back into the range and targeting the opposite end.
– Stay in balance.
An important early Market Profile reference for Wednesday could be the prominent, 11 TPO wide point of control at 2337.75. If the market opens within range, a breakout to either side of the range would probably have better odds of continuation if price first tests the wide POC.
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