Tag Archives: selling tail

Breakout of Balance




After the market’s failed breakout attempt of the five day balance to the downside on Tuesday, one scenario was for the market to break out and find acceptance above the five day balance high at 2454.00 on Wednesday. Potential targets were the upper distribution high from the 8/17 selloff profile at 2459.50, and the single prints above to the high from that day at 2464.00. Wednesday’s high was at 2459.75, a poor high with no excess.

breakout of balance
After a failed breakout of the 5 day balance to the downside a day before, the market broke out to the upside the next.

If price opens above 2454.00 on Thursday (the prior 5 day balance high) the higher price levels noted in Tuesday’s market profile report could still be relevant.

Acceptance above 2459.75 and back into the excess single prints from the 8/17 selling tail could first target the high from 8/17 at 2464.00, and the wide point of control at 2467.75 and remaining unrepaired anomalies from the 8/16 profile. The matching highs from 8/9 and 8/16 at 2474.00 are within striking distance if the market finds acceptance above 2464.00.

Wednesday’s late pullback low at 2453.00 could be an important early reference on Thursday, depending on where price opens. Generally, the prior balance high (2454.00) should be support if the market broke out higher on strength. If Wednesday’s pullback low at 2453.00 fails to hold and price is accepted below that level, it puts price back into the five day balance, questioning the last two day, low volume rally (NYSE daily volume was very light at 2.51 billion).

split view profile breakout of balance

Potential lower targets are the single print at 2449.50, previous resistance, acceptance below that level probably tests Wednesday’s excess buying tail. Tuesday’s lower distribution high at 2436.00 comes into focus below Wednesday’s low.

End of month options expiration should bring volatility.

(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 Near Midpoint of July 27th Selloff Range

The ES balanced near the midpoint of the July 27th selloff range on Monday, in between the single print and upper distribution from that day at 2475.70 and the excess single prints above the prior week’s low at 2457.00.

ES balanced near midpoint of selloff range
ES balanced near midpoint of selloff range

The bulk of Monday’s trade took place in just about a 5 point range, with excess on both the top and the bottom of Monday’s profile leaving both a selling and a buying tail.

Looking at the entire 9 3/4 total point trading range as a balanced day, early acceptance above or below Monday’s very wide point of control at 2470.00 could give clues as to attempted market direction. When excess, which occurs in all time frames, is removed, the potential for change exists.

Trading above Monday’s high at 2475.00 retests the upper distribution from July 27th, acceptance back into that balance could easily test the all time high at 2480.50. While there is substantial excess on the weekly and monthly bars, there is only three ticks of excess at the all time high on the daily TPO chart.

Acceleration and/or acceptance with developing value below Monday’s low at 2465.25 brings Friday’s low at 2461.50 and the excess single prints from July 27th into focus, taking out that excess could also signal potential change.

A breakout from either side of Monday’s balance could have better odds of continuation if price first revisits the wide POC. Another possible scenario would see price remain in or around Monday’s balance on Tuesday, although probably unlikely because of the small range.

The July close at 2470.00 was well above its low at 2505.25, one timeframing higher for 8 consecutive months. With the daily bar balancing, the weekly bar is in it’s 5th consecutive week of one timeframing higher. Trading below 2457.00 would stop the weekly one timeframing higher, another potential sign of change.

(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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Market Profile Open-Drive Leaves Early Selling Tail, Late Day Selling Leaves Spike

The ES gapped open above the previous day’s poor high on Thursday and quickly sold off from a tick below the previous weekly high at 2142.50, accelerating lower into the previous pit session range.

The selling, which was on higher first half hour NYSE volume, left many excess single prints in the opening period, leaving a market profile selling tail. Higher than expected pending home sales had no effect as the selling intensified in B period, repairing all of Wednesday’s anomalies. B period also left a long string of excess single prints.

es-selloff-from-weekly-high
After balancing in C and D periods, the market rallied in E, filling in the B period excess single prints and closed the double distribution.

After becoming rotational and developing a wide point of control at 2132.00, the market one timeframed lower from J period into the close, accelerating lower in the final period and leaving a late day spike from 2126.50. Thursday’s pit session ended as an outside day.

With no clear direction from longer term money ahead of Friday’s GDP report, short term traders are controlling this range bound market, continually finding themselves too long and too short, and constantly correcting through liquidation breaks and short covering rallies.

The immediate market profile trading reference for Friday, depending on where the ES opens, could be the base of the late day spike at 2126.50. Did the late break trade low enough to cut off the selling, or will price need to search lower to find two sided trade? Friday’s 8:30 ET GDP report should provide early volatility and a possible direction for Friday’s trade.

If price opens above the spike, and finds acceptance above the point of control at 2132.00, the market could test the 2133.75 K period high – which was exactly at the previous close, and the E/F rally high at 2136.25 – which was exactly at the overnight half back level. Both very visual trading references used by short term and day traders, the weakest of hands.

If/when excess is removed it can signify change or the potential for change to take place. If the market can take out Thursday’s excess single prints and find acceptance above the previous week’s high at 2142.50 it could bring higher prices. As the end of the month draws near, the ES is one timeframing lower on the monthly chart. Price would have to trade above 2163.50 before the end of October to stop the one monthly timeframing.

To the downside, acceptance within or below the spike could easily test Thursday’s low at 2122.50, acceleration/acceptance below 2122.50 could make an attempt to repair the poor low from Oct. 17th at 2117.75, and potentially test the current multi day pit session trading range low at 2107.75.

(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. Please read our disclaimer

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