With overnight inventory 100% short from the previous pit session’s close, the market opened at 2372.00 on Monday, inside the gap between the prior pit session low at 2374.25 and February 28th high at 2367.00.

There was no attempt early to correct the short overnight inventory, but short term and day time frame traders continued to dominate the market, driving price lower from the overnight Globex session point of control at 2373.25 to just one tick above the Globex low at 2368.50 in the opening half hour period.

Bouncing mechanically from the overnight low, the B period high traded to just one tick above the A period high, making it an early poor high, before reversing again and grinding its way lower again in C/D periods to fill the gap from February 28th (and top of prior four day trading range) to the tick at 2367.00.

Monday’s regular trading hours market profile chart left a poor C/D period low, with only one TPO of excess, at 2367.00.

With no trade below 2367.00 the market looked like it found a place where two sided trade could take place, developing a six TPO wide point of control at 2370.00. But the combination of the short overnight inventory, early short pit session inventory and the lack of price continuation lower probably all led to what appeared to be a short covering rally, sparked by a breakout above the small range, inside bar of E period. The market one timeframed higher off the low, accelerating through the earlier A/B poor high, filling the gap and finding acceptance back inside the previous range.

The low from Friday at 2374.25 very mechanically offered support for the I, J and K bar lows, but an attempted breakout in L period above the two consecutive J/K inside bars fizzled, with price failing to reach Friday’s wide point of control and falling back to Friday’s low.

Price breached that support low and tested the lower distribution high at 2373.50 in the final minutes of the session, before settling to close at 2375.50, two ticks above the point of control which had migrated higher in the final period. Value finished the session as mainly lower.

The market is one timeframing lower on the daily chart, and would have to trade below 2357.25 to stop the onetimeframing lower on the weekly. Depending on where price is at Tuesday’s pit session open, Monday’s late pullback low at 2373.50 could be an important trading reference. Price acceptance below that level, and into the lower distribution, could easily lead to a test of Monday’s poor low at 2367.00. Acceptance below 2367.00 and back into the prior trading range has the potential to see price test the opposite end of that range at 2351.50.

If price can find acceptance and remain above 2373.50 on Tuesday, and more importantly above Monday’s POC and close at 2375.00/.50, the high at 2378.25 is the next visual resistance level, as trading above Monday’s high would stop the one timeframing lower on the daily.

The next higher market profile trading references, and potential targets, if price can rally above Monday’s high are last Friday’s wide point of control at 2380.00 and high at 2383.25, followed by the wide point of control from March 2nd at 2386.00.

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