Three Day Balance

The ES has yet to find acceptance back above the 2449.25 single print and into the upper distributions from the 8/17 and 8/22 market profile daily charts.

three day balance in ES

Opening near the high of the prior day’s small 9 point, balanced inside day, a classic “look above balance and fail” scenario quickly played out early Thursday, as price traded 5 ticks above the prior high but a tick short of the single print below the upper distribution from Tuesday’s triple distribution profile.

The opening 30 minute period selling left a long string of unfilled single prints (10 points) and traded through Wednesdays entire 9 point range, but first half hour NYSE volume was relatively low at only 283,515, suggesting the early selling would not be lasting.

End of day NYSE volume under 2.7 billion. There was also no “outside day”, where price trades above or below the prior day’s range but closes outside of the opposite end. Not a sign of strength by the bears.

Value developed lower Thursday with a widening point of control hovering around 2440.75 where it closed, matching the CME settlement..

Although 2454.00 is the actual high of the three day balance, the single print below Tuesdays upper distribution at 2449.25 could be important early on Friday if price opens within Thursday’s range.

Price acceptance back above 2449.50 could target Tuesday’s high at 2454.00, and potentially tests the upper distribution high from 8/17 and excess single prints above 2459.75. Acceptance above 2460.00 brings the weak matching highs from 8/9, 8/16 at 2474.00 into focus.

Failure to trade above 2449.00 keeps the short term downtrend in tact and should draw price, minimally, back to Thursday’s wide part of Thursday’s profile, targeting Thursday’s settle and point of control at 2440.75.

If price opens below 2440.75 that level could be resistance, with high odds of price testing the previous two daily lows at 2434.50 and 2432.75 (top of gap), and potentially the unfilled gap from 8/21 at 2429.50.

On Friday the Jackson Hole summit continues in Wyoming with Fed Chair Janet Yellen speaking at 10am EST (1400GMT) and Mario Draghi, President of the European Central Bank, at 3pm EST (1900GMT), among other Fed speakers. Volatility is likely.

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