Tag Archives: short covering

Probable short covering leaves three distributions and poor low in the profile chart

short covering
Probable short covering following the prior day’s selloff left multiple anomalies in the profile chart. Anomalies are often partially repaired soon after they are created, and often the next day (at least partially) . Wednesday’s chart was a triple distribution profile, and has another poor low at 2701.75.
poor low in market profile chart
poor low in market profile chart
Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: 

Two distributions, probable short covering rally

Anomalies in the market profile chart are often repaired, or traded back through, soon after they are created. Wednesdays balance and Thursdays rally traded back through the multiple anomalies in the profile following the April 24th selloff. Thursday’s (4/26) market profile chart also left a poor high at 2675.50, closing just off the high of day.

short covering rally

Depending on where price opens in regards to areas of balance, potential trading scenarios could include:

– Look above or below a balance and accelerate/find acceptance

– Look above or below a balance and fail, targeting the opposite end

– Remain in balance

Prior wide “naked” (not yet revisited) points of control can act as price magnets, often drawing price back to them. There are very prominent points of control both above and below Thursday’s range.

market profile daily charts

Focusing on the two separate distributions in Thursday’s profile, price acceptance within the upper balance would probably have decent odds of repairing the poor high, and potentially re-testing the high from 4/24, and if the market remains strong price could target the upper excess single prints from the 4/20 profile.

Carrying past information forward, the high from 4/19 at 2703.50 was mechanically just a single tick shy of filling the gap from 4/18, and the very wide naked point of control from the 4/18 profile at at 2714.00 has not been revisted. The prior weekly high is at 2718.00.

split view market profile chart
Split view market profile chart 4/26/18

If price opens in or finds acceptance back inside Thursday’s lower distribution, below the pull back low at 2663.75, the lower excess single prints in the profile could be tested, followed by the small gap at Wednesday’s high at 2645.00. Acceptance back into the 4/25 range could target the 10 TPO wide naked point of control at 2629.50.



(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)

Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: 

Short covering into the close



With long overnight inventory coming into the regular trading session, price opened above the base of the spike from the prior session but failed remain above it, trading back into the spike in the second half hour period. In times of high volatility, standard market profile trading references are not often as in reliable “normal” trading environments.

short covering negates prior spike

The high of the third period (30 minute) bar could not get back above the spike, reversing at it exactly before selling lower into Friday’s lower distribution in the fourth period.

Split view profile 3-26-18
Split view profile 3-26-18

Price one timeframed higher off the D period low, eventually rallying into the close, to trade as high as 2662.75, one tick below the top of the spike from the 3/22 profile.

Some of Monday’s rally appeared to be very mechanical, for example, bouncing near the current session midpoint at the G & H bar lows, and rallying when the K period low failed to trade back below the opening (A) period high. NYSE daily volume was also considerably light compared to the size of the market rally, at only 2.4 billion shares.

Value for the session was overlapping to lower, despite the apparent strong rally into the close.

Monday’s stretched out profile repaired the anomalies from the prior session’s profile, but left more anomalies of its own. Anomalies are often repaired soon after they are formed. If price opens within range the odds could favor their repair, at least partially, on Tuesday considering the “mechanical” nature of Monday’s rally.

If the rally continues, price could target the point of control from 3/22 at 2672.50 and the un-repaired anomalies from that profile. The next potential targets would be the high from that session at 2698.25, the bottom of the unfilled gap above, and 2712.50, the top of the unfilled gap from 3/21.

With a light news week ahead and the futures market closed on Good Friday, the odds could favor more balance the remainder of the pre-Holiday week.

The longer and intermediate term trends are balancing, trading in a range from the February correction low at 2535.25 and, arguably, the recovery high at 2807.50. The short term trend, on the daily bar chart, is down with a two day balance.

Currently, March is an inside month.



(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)

Share  Facebooktwittergoogle_plusredditpinterestlinkedinmail


Subscribe: