Following Tuesday’s pre-FOMC Day, gap open lower and small seven point trading range (Tuesday ended the pit session as a near perfect bell shaped profile curve, but with both a poor high and a poor low), the ES opened Wednesday’s pit session at the lower end of Tuesday’s tight balance and quickly traded lower, taking out the three almost identical “weak” lows from Aug. 11, 12 and 16th.
D period eventually repaired the poor low from Aug. 10th but price failed to trade down to close the gap at 2163.50 left unfilled from Aug. 4th.
Wednesday’s profile left multiple anomalies. Some, or all, anomalies in stretched out profiles are often repaired in future trading sessions soon after.
Currently, there is excess on the all time high at 2190.75 on the daily, weekly and monthly bar charts. There is no excess on the market profile pit session chart because it is a “poor high” at three TPO’s wide. Poor all time highs can last for sustained periods of time but history has shown they are eventually repaired.
While the monthly bar chart has resumed one timeframing higher the weekly and daily bars have not. An immediate short term market profile reference for Thursday could be Wednesday’s poor high at 2181 (which was also the exact overnight high). If taken out, one timeframing on the daily chart will have stopped. If not, some or all of Wednesday’s anomalies could be repaired and price could possibly test Wednesday’s low.
Potential targets above Wednesday’s high include Tuesday’s poor high, the unfilled gap from Aug. 15 at 2184.50, and the all time high.
It would also not be uncommon for the market to trade above the previous day’s high, temporarily ending the one timeframing lower and allowing short term inventory to balance, then trade back into the previous day’s range and continue one timeframing lower.
(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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