Tag Archives: rally high

Breakout of Balance or Just A Liquidation Break?

Early in the opening “A” period on the Market Profile chart Tuesday, price tried to again rally exactly off of the previous day’s low at 2159.75, but failed exactly at the overnight half back at 2164 (indications of more short term traders buying and selling off of exacting price references?) and reversed back through Monday’s low.

Momentum traders piled on, one time framing lower for the first 8 market profile periods repairing the poor low from July 28 and the matching daily lows from July 19 and 27.


After leaving many single prints from the A and B periods selloff the market tried to balance, printing two inside bars in D and E periods, and developed a 5 wide POC by G period at 2147.75.

Still one time framing lower the market traded below that balance, leaving a poor low at 2141.50, short of filling the first of three gaps below the market at 2136.75.

Probable short covering began in J period with the market one timeframing higher for the remainder of the session, but price could not get back to the day’s half back level and closed the session at 2153, the late day rally high.

There is only 4 ticks of excess on the monthly bar at the all time highs. In addition, the latest all time high now at 2177.75 was made in the extended hours trading session.

At just 3.8 billion, NYSE volume was not particularly high in comparison with the size of Tuesday’s move down.

Focusing on Wednesday, IF price opens within the lower distribution from Tuesday’s profile, will price attempt to trade with acceptance back above the late day rally high at 2153 and fill in some of Tuesday’s A/B single prints (and reenter the multi-day trading range), or will selling pressure continue and pull price back down in attempt to repair the 2141.50 poor low, and the unfilled gap from July 11? Another possibility would be for the market to stay in balance with Tuesday’s lower distribution.

There was no continuation late with Tuesday’s selloff. If more serious money was selling price probably shouldn’t have reversed so much off the lows, and NYSE volume should probably have been higher. But if Tuesdays selloff was a true breakout to the downside and not a liquidation break from shorter term traders, will Wednesday open with a gap lower? If it does, monitor if price gets accepted or rejected back within Tuesday’s lower balance.

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Double Distribution

More opening chop Thursday morning as the ES pit session opened in between Wednesday’s upper and lower distributions, with A and B periods both bouncing from the high of the previous 4 day balance from 7/14 to 7/19 at 2164, leaving a poor low.


After rotating in a four point range for the first four periods the market accelerated lower through D period’s inside bar at the close of the European trading session, taking out the earlier A/B poor low and reentering the previous four day trading range.

The market one timeframed lower for 8 consecutive periods, with J period pausing exactly at the wide point of control from July 19 before finding its low of the day at 2153.50.

Value ended lower on the day, with a five wide POC migrating lower to 2160.60 from an earlier five wide TPO POC at 2166.25.

If the market opens inside the lower distribution on Friday, market profile day trading references are the late rally high at 2159.75 followed by the the low of the upper distribution’s single print at 2163.75. There is no excess on the pit session all time high at 2169.75. If price reenters Thursday’s upper distribution above 2164 potential targets are the opposite end of that balance at Thursday’s high, and the poor all time high.

Acceptance below the late rally high could target Thursday’s low, acceleration below that level could target the low from July 15 at 2149, followed by the very prominent naked point of control from July 13 at 2145.25.

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Another new all time high in the S&P eminis


After the fourth gap higher opening in the past 5 trading sessions, and another new all time high set at 2168.00 during the 25 point overnight session, the ES opened 14 points above its previous close but couldn’t manage more than a 10 point range during pit session trading hours. Three of those gaps remain unfilled.

In the opening 30 minute market profile ‘A’ period the ES traded down exactly to the half back level from the overnight session, and the lower end of its upper distibution (a very visual, mechanical short term traders reference level), before “rallying” 8 points to set another new all time pit session high at 2163, five points shy of the overnight high.

From C period the market one timeframed lower for 7 consecutive periods, eventually taking out the previous weak A period low in H period but did not form a second, lower distribution and re-entered the earlier initial balance. The bounce off the lows left a poor low (just one tick of excess between the H and I periods).

Thursday’s profile is in balance. The wide point of control at 2157.50 and the late rally L/M period high at 2160.75 could be short term trading references for Friday.

If price takes out Thursday’s poor low and accelerates lower, the top of the previous two day balance from 7/12, 7/13 at 2150.75 comes into focus, acceptance back within that range could easily target the wide naked point of control at 2145.25 and the lower end of that two day balance at 2138. To the upside, the new all time high made in the after hours market at 2168 could be revisited.

The market is still in rally mode from the Brexit lows, with the daily chart one timeframing higher for seven consecutive periods, while the weekly chart is one timeframing higher for three. There is the potential for the monthly chart to finally show meaningful excess for July, but that won’t be determined until trading begins in August.

Thursday’s overnight session could have some volatilty as Chinese GDP, Retail Sales and Industrial Production reports are scheduled to for release.

Friday is also a busy day for the U.S. economic calendar as Consumer Price Index, Retail Sales and Empire State Manufacturing Survey reports are due out at 8:30 EST, with Business Inventories and Consumer Sentiment at 10:00 AM EST.

(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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