Tag Archives: short covering

Early Liquidation Break Ends Weekly One Time-Framing Higher, Short Covering Late

early liquidation break, short covering late

Early selling at the open intensified as price repaired previous multiple poor lows on the daily Market Profile charts, but falling short of repairing the the poor lows from 10/9, 10/3.

Apparent short covering off the G period two-tick excess low rallied price back 17 points to one tick below the A period single print.

The selloff gained momentum after price broke through the prior three day balance low and bounced back exactly to that level and halfback from A period, suggesting the move lower was initiated by shorter time frame momentum traders.

The late rally high at 2558.75 could be an early important trading reference on Thursday, acceptance back above that price level and into the upper distribution probably targets Wednesday’s high and potentially the very prominent point of control from 10/24 at 2567.50, and the poor high from that profile at 2570.25.

Failure to find acceptance back above 2558.75 could keep the downward tone from Wednesday in tact. Price had stopped one timeframing higher on the weekly chart on Wednesday. For more potential serious change price would have to trade below a prior weekly low at 2539.25 and test the current October low.

Price has been one timeframing higher on the monthly chart since the November 2016 Presidential election, if it can close near the October low at 2517.50 by the end of the month the odds could be good that the monthly one timeframing would be challenged in November.

The current all time high was made in the overnight electronic session at 2577.25, something to carry forward as to date, any all time high made in the Globex market has always been traded through during a regular US hour trading session. Although, however, it can remain untested for quite some time.

(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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Another New Record High. Anomalies, No Excess on Daily Market Profile TPO Chart

A gap open higher Wednesday with mostly long overnight inventory adjusted after the opening bell, as price traded back into the prior day session range.

another new all time high in the ES

Traders drove price lower through Tuesday’s wide point of control and close, but reversed in C period after trading into the lower excess from 9/26 by only one tick.

split view profile of probably short covering rally
split view profile of probably short covering rally

A late short covering rally exploded to another new record high, leaving another poor high with no excess in the profile at 2509.25.

The F/G period low was questionable at 2495.75, being exactly at the prior session’s close, and the profile left multiple anomalies, again suggesting the session was dominated by mostly short term traders. Price will often repair at least some of the anomalies in a future session, if not the next.

Value was overlapping to higher, but Wednesday’s point of control did not migrate higher with the rally.

(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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Failed Breakout of Balance




A late afternoon press release on Monday stating North Korea had launched a ballistic missile over the northern Japanese island of Hokkaido that fell into the Pacific Ocean, possibly to demonstrate its capability of reaching the U.S. island territory of Guam, caused U.S. markets to open sharply lower on Tuesday.

failed breakout of balance

But following the 15.5 point gap opening lower the ES short covered back into the prior five day range, and traded back into Monday’s range. Price only stopped one timeframing higher in one period (H) and not again until until the final period, closing back near the high of the previous session.

The rally put price back near the center of the August range, again lowering the odds of the monthly one timeframing higher to come to an end by the end of this month, as all timeframes appear to be balancing and there is substantial excess at the all time high. The ES has been one timeframing higher on the monthly chart since the November 2016 Presidential election.

But if Tuesday’s move higher was mainly short covering (NYSE daily volume relatively low at only 2.73 billion), that could weaken the market. If the ES closes the month near the lower end of the August range, the odds are still high the monthly one timeframing could end in October.

Tuesday’s profile left two distributions. Price acceptance below the late pullback low at 2445.00 should attempt to repair some of the anomalies in the upper distribution, and potentially test the lower end of it at 2438.25

anomalies in market profile chart
(anomalies shaded in red)

Acceptance back below the single print separating the two distributions at 2436.00 could test Tuesday’s lower excess.

But Tuesday’s auction higher, after the gap opening lower, was a failed breakout of the five day balance to the downside. If price opens inside the upper distribution, the odds are probably good that Tuesday’s high will be retested, along with the Monday’s high at 2449.25.

Acceptance above that level first targets the five day balance high at 2454.00, potentially the upper distribution high from the 8/22 selloff profile at 2459.50, and the single prints above to the high from 8/17 at 2464.00.

The matching highs from 8/9 and 8/16 at 2474.00 could be within striking distance if the market rallies to find acceptance above 2464.00.

(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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