Tag Archives: rally high

Volatility Ahead of End of Quarter

A 38+ point selloff from the open on Thursday, with the ES trading lower to a new monthly low at 2402.25.

ES 38 point selloff market profile chart

Thursday’s selling at the open left a questionable high, matching exactly the previous regular hour trading session high, which was also a poor high because it had no excess. Selling was also mechanical at the B/C period high at 2433.50, exactly at the low of Wednesday’s upper distribution.

ES - split view profile of 38 point selloff from opening
ES – split view market profile chart of 38 point selloff from opening

An important Market Profile trading reference for Friday could be the late M period rally high at 2422.50. Acceptance above that level targets Thursday’s single print and upper distribution at 2426.00. Filling in and trading above 2426.00 potentially tests Thursday’s excess A period single prints, and possibly even the opposite extreme of the distribution, the poor and matching highs at 2440.50.

Failure to find acceptance above the 2422.25 late rally high keeps the downward tone from Thursday in tact, potentially retesting the low from Thursday and the psychological 2400.00 price level.

Because Thursday’s 38 point selloff was followed up by a 20 point recovery, the profile ended the regular session as another double distribution. Therefore, if the market opens within Thursday’s lower distribution on Friday, balance rules could apply in regards to the distributions. Potential trading scenarios could include:

– Look above or below the lower distribution and either accelerate higher/lower, finding acceptance and developing value in the direction of the breakout.

– Look above or below the lower range and fail, returning back into the balance and targeting the opposite end.

– Remain in balance.

Another notable market profile trading references for Friday could be at Thursday’s L, M, & N bar lows at 2416.00/.25/.50, each just one tick apart. The mechanical buying off the previous bar’s low, probably by shorter timeframe traders, could temp larger traders to probe for stops below that level.

The one timeframing higher on the weekly chart had stopped on Tuesday. When the monthly higher one timeframing ends, it could be a sign of more significant change occurring in the market. With just one trading day left in the month, closing near the low of the month’s range on Friday increases the odds of the monthly one timeframing higher coming to an end.

(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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ES – Balanced inside day following selloff from all time high

Monday’s regular trading session opened within the previous day’s elongated range but below the prior close, and below the late rally high from Friday at 2429.25.

The ES sold lower in the opening period to two ticks above Friday’s single print buying tail, mechanically selling at halfback intra-bar in A period and leaving a long line of single prints (over 8 points) – early clues that the early move lower was probably just a liquidation break rather than from larger time frame money continuing the selloff from Friday.

ES Market Profile chart- Balanced inside day following selloff from all time high
ES Market Profile chart- Balanced inside day following selloff from all time high

Although early ES volume was higher, and first half hour NYSE market volume was substantially higher at over 535,000 shares, price did not find acceptance into Friday’s single print buying tail.

The market balanced in less than an eleven point trading range on Monday, leaving a poor high at 2427.50 (no excess) and a very prominent point of control at 2422.00.

An early reference on Tuesday could be on the prominent point of control, as acceptance above that level has good odds of repairing the poor high. If price can also find acceptance above Monday’s high, odds suggest price would attempt to repair some of the anomalies from Friday’s range.

Split view Market Profile chart 6-12-17
Split view Market Profile chart 6-12-17

Balance trading rules could also apply on Tuesday, depending on where price opens: Look either above or below the high or low and either accelerate, or fail. A failure of an attempted breakout from the inside day could target the opposite end of the balance. Another potential scenario would see price remain balanced around Monday’s range ahead of Wednesday’s 2:00 PM ET FOMC Meeting Announcement.

Potential destination trades to the downside, if price breaks out lower, could include Friday’s low at 2412.20, the June 1st low at
2410.50 and the unrepaired prominent point of control from May 31st at 2405.25 (September contract).

There is now substantial excess at the all time high on the short, intermediate and longer term time frames, although the profile from the June 9th record high is a poor high, with only one tick of excess.

(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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