Tag Archives: spike

Break Out Of Balance to the Downside

After a look above and fail of the extended trading range on Tuesday, price broke out to the downside on Thursday, trading through the excess lows of the range to take out two more prior weekly lows, before finally closing 23.5 points below Wednesday’s low.

ES market profile chart 8-10-17

With overnight inventory 100% short heading into the Thursday’s regular trading session, price opened at the lower end of Wednesday’s range, well below the very wide POC. Price failed to trade back above the prior week’s low at 2463.50 (the weekly onetimeframing higher ended the prior day).

Thursday’s emotionally driven selloff, following more severe Trump/Korea rhetoric, left multiple anomalies in the stretched out profile. Other notable market profile references on the chart are the K (11th) period rally high at 2453.50, and the late day spike base at 2442.75.

ES split view market profile chart 8-10-17
ES split view market profile chart 8-10-17

Failure to find price acceptance above 2442.75 on Friday could keep the current downtrend in tact, as nothing would have changed relating to Thursday’s downward trend.

Acceptance back above the base of the spike on Friday could see price attempt to repair at least some of the anomalies from Thursday’s profile, with potential resistance at the 9 TPO wide POC at 2449.50, and the rally high at 2453.50, below the 2457.00 prior trading range low.

ES daily chart after August 10 selloff

If price opens within Thursday spike, below 2442.75, it would imply that price did not go low enough on Thursday to cut off the selling, and could have good odds of testing Thursday’s low. Acceptance below 2435.75 could bring in more liquidation, first targeting the top of the unfilled gap from July 11/12 at 2434.75, then potentially the gap fill at 2427.25.

(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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Fed Day Late Rally, ES Still One Time Framing Higher on Daily Chart

After a lot of chop and indecision before and after the release of the Fed minutes Wednesday the ES staged a late rally in the final three 30 minute periods, auctioning to within two ticks of the 2158 September 9th selloff high.

fed-day-late-rally

The single print at 2147.50 in L period could be an important trading reference on Thursday. The ES closed at 2156.25, near the top of the late spike and September 9th high. If the market opens above the spike it could suggest higher prices from Wednesday’s Fed rally are accepted, and the market could then attempt to fill the gap from September 8th at 2169.50. There is also an unrepaired very prominent point of control from that day at 2173.25.

Opening within an upward spike ordinarily suggests that price is being accepted, at least initially, and keeps the rally in tact while allowing two-sided trade to take place. Wednesday’s late rally left two anomalies in the spike. Aomalies are often a sign of emotional trading and usually have good odds of being repaired.

Opening below the base of the spike could be considered negative as price would be trading back into the September 19th and 20th two day balance. When a market reenters a previous balance the potential target is the opposite end of balance, in this case Wednesday’s low at 2131.50 (which was just two ticks above the previous day’s close).

market-profile-trading-references-september-21-2016

Although the market has been one timeframing higher for the past 5 days, the past three session lows are tightly bunched together within two points of each other. If price breaches 2131.50 it could potentially set off a “firecracker effect”, hitting stops below those lows, and accelerate lower. The poor low at 2123.00 from September 16th remains unrepaired, along with the poor/weak low at 2112.00 from September 14th.

(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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ES Sells Off, Monthly One Time Framing Higher Ends

The ES gapped open lower on Friday and sold off more than 55 points from its previous close, one time framing lower in every 30 minute period but one.

september-9th-es-selloff

Will this wide price range now become a new trading range where two-sided trade can take place, or will the eminis continue lower in search of balance? While ES futures volume was split between the back and front month contracts in rollover, NYSE volume was moderately higher at 4.2 billion compared to the size of the downward price move.

Usually there is no point of control on trend days where the market is one time framing lower for most of the session, but the market tried to find balance late on Friday in I through M periods, forming a five TPO wide POC at 2138.50 but broke lower in M period. If the ES pit session opens Monday morning within Friday’s large trading range, the late day spike base at 2134.00 could be an important trading reference.

Opening and trading above 2134.00 would suggest the spike was rejected, leaving a buying tail, while opening below the spike base would suggest price has not auctioned low enough to cut off the selling, and price is still looking for two-sided trade. Opening within the spike suggests price is accepted and the downward break remains intact, and two-sided trade can take place.

On the larger timeframe charts, the ES has now stopped one timeframing higher on the monthly chart, and the weekly bar printed as an outside week. Both very negative.

(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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