Tag Archives: triple distribution

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
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Gap & Rally at Open Leaves Lower Excess, Three Distributions in ES Market Profile Daily Chart




Ignoring the nearly 100% long overnight inventory, the ES rallied at the open Tuesday morning, trading higher nearly 10 points from the wide overnight point of control to a tick below the POC from the 8/17 selloff range at 2442.50 in the opening period.

NYSE first half hour value was somewhat low (292k vs 276k Monday) compared to the 9.5 point opening drive higher, which left a long line of unfilled single prints suggesting the move could have been attributed mainly to short covering following the prior week selloff. End of day NYSE total volume was relatively light, at just 2.66 billion.

Single prints are a form of excess. An elongated string of excess single prints made early in the day will often see price return to fill in at least some of them in. But Tuesday’s opening period single prints were created following a 3.5 point gap open higher. Gaps are also a form of excess which, when combined, can be a more potent sign of strength. By the end of B period (the second 30 minute period) there were still 7 points of unfilled excess single prints (10 points including the gap).

On the day, price stopped one-timeframing higher one time in I period, not uncommon for a trend day, although the point of control had widened to 6 TPO’s in J period.

triple distribution trend day
triple distribution trend day higher

Price closed near the midpoint of the monthly range, which at least temporarily reduced the odds of seeing an end to the monthly one timeframing higher.

On Wednesday, looking at each distribution as a separate balance area, balance rules could apply – look above or below a balance and either accelerate or fail, or remain in balance. If price returns into a prior distribution the opposite end of that balance is the potential destination.

If price opens above Tuesday’s range or finds acceptance above Tuesday’s high, the upper end of the distribution from 8/17 at 2459.75 and excess single prints above are the first potential targets, followed by the three anomalies in the 8/16 profile and the matching daily highs (8/9, 8/16) at 2474.00

If price opens in or reenters Tuesday’s upper distribution from above, the low of that distribution at 2449.50 – which matches the low of the 8/17 upper distribution – and the single print 2448.75, is potential short term support.

Opening inside of the lower or middle distribution is not as positive and implies that Tuesday’s price action was mainly short covering, there would be good odds of a balancing day, potentially testing Tuesday’s lower excess.

ES daily bar chart through 8-22-17
ES daily bar chart through 8-22-17

(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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