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Market Profile Analysis of S&P Futures – 02.23.18

Market Profile Analysis of S&P Futures – 02.23.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

WWW.WINDOTRADER.COM/SHADOWTRADER

Inside day yesterday with the entire RTH range inside of the prior day’s RTH range. Value was also mostly unchanged and overlapping to down.

As written yesterday, assume the excess low from the 2/21 RTH session is secure until it gets taken out. Bias is bullish until then.

Overnight inventory is almost 100% net long. It is not a true gap, however, as we will be opening within balance. On any early rebalancing of that inventory look for a possible target of 2714.00 which is where the most volume traded yesterday.

Market continues to be in balance with volume lower on this consolidation than it was on the recent rise. When the market is “ready” it will “look above” or “look below” and the balance rules will apply.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 02.22.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

Comments late day on the SquawkBox (I’m usually there Monday and Wednesday afternoons with Scott Gillam) proved to be prescient as I was saying that late day sellers usually don’t fare well. S&P futures are gapping up 12.50 currently and /NQ about 39.

Value has been relatively unchanged for four sessions now.

Yesterday’s volume and TPO POC’s did not migrate lower with price and the lower end of the market profile distribution was a large spike. This is never good location for those who exited the market short.

Overnight inventory is balanced to net short. As of now we would be opening within balance (yesterday’s range) and thus gap rules are not in play. Spike rules, however, are.

The spike is defined by the area from 2714.00 down to the RHT low at 2693.50. Trading within the spike and accepting here would be bearish because it affirms the lower prices in the spike. Rejecting the spike and trading and finding acceptance above it would be more bullish as the market is rejecting the lower prices and not treating them as fair. If you click to enlarge the market profile graphic above you’ll see that the entire spike is on a taper of volume, in fact no price level does over 10,000 contracts until all the way up to 2719.75. I’ll leave you with THIS LINK again. I continue to be amazed at how few people are willing to pay for this valuable information that pays for itself over and over every day (for me at least!). Yes, I know…the data fees, etc. Well, you either want to be a serious professional about this or you don’t. It’s a commitment.

The ONH is just inside of yesterday’s VA. Am carrying forward that overnight prices have rejected the value area thus far. Early movement inside the VA probably brings in more covering. Target halfback and then the TPO POC at 2731.00 if context is telling you that we could carry that far.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 02.21.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

www.windotrader.com/shadowtrader – CLICK TO ENLARGE

Yesterday I sent a “What’s Peter Thinking” text to our Options Advisories members that had this section in it which I believe sums up current market sentiment perfectly:

As I come to my desk this morning I see that overnight action in the futures is confirming what I was thinking yesterday. How is it confirming? Am I just fitting the action to my personal bias because I have a couple longs on? Or is it really confirming and I’d be thinking the same thing even if I was completely flat? I know it’s the latter because I can point to specific absolutes that are not opinion. Let’s look at some:

-Value was overlapping to lower from Friday’s RTH session and equal to Monday’s shortened session.
-The Volume POC yesterday did not migrate lower with price and sellers were more active in the afternoon which is never good for them.
-Yesterday’s RTH low was an excess low and the overnight inventory is balanced with an ONL that failed to get outside of yesterday’s RTH range. Surely nervous bulls that fear another correction around the corner would be engaging in a little price discovery below the prior day’s low?
-Nasdaq 100 stocks (and futures by default) are showing a ton of relative strength out there further confirmed by the fact that /NQ’s are up 26 handles currently in the premarket.
-All of the above is happening on a key test of the 61.80% Fibonacci retracement of the recent move from high to low. Instead of flat out rejection at this level, it appears to me that the market is balancing.

Could the market still roll over back down to the recent swing lows? Certainly, but the longer we stay in range here, the better the odds that we rally. Some people call the market a “discounting mechanism” which prices in future events in the present time. It’s also a “disappointment mechanism” whose sole objective is price discovery of balance with the least amount of people on board to benefit from the moves from one balancing point to the next.

2721.50 is the ONH which is the main upside reference for today. If you click to enlarge the market profile graphic above you can see that it is also just one tick below halfback of yesterday’s RTH range. This is an important nuance and tells us that overnight sellers are of the weaker variety. It’s simply too nuanced and perfect and obviously visual. That sort of mechanical selling has higher odds of being retaken. As such expect higher prices if that ONH is breached.

2705.75 is the RTH low from yesterday. Carry forward that the ONH stopped at 2706.25, just a bit above it. Those buyers are of the same low confidence variety as the sellers who sold halfback. This implies further balance to me which implies everything I wrote above…..

As always keep your eyes peeled for developing value and trade in context of the internals. They are a torch in the darkness, a beacon in superstition’s RTH session, an inspiration, and a prophecy.

Have a nice day,
peter

Market Profile Analysis of S&P Futures – 02.20.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

www.windotrader.com/shadowtrader

Shortened session on the holiday yesterday so remember that your Value Areas and pivots are calculating off of 2/16 ignoring the Monday RTH trade. Thus considering the Monday RTH action as being part of one long overnight action, we are trading out of balance and gapping down about 18 currently from Friday’s settlement.

As I’ve been away for a couple of days, my first order of business this morning is to look at a daily /ES chart and see where we are in relation to the larger range and current Fib levels…

CLICK TO ENLARGE

The chart above is a daily /ES with a Fibonacci retracement drawn in from high to low to see how far we’ve bounced since the double bottom low. Note that futures peaked just a hair over the 61.80% retracement level. This is the “golden ratio” and the most important of the fib levels. It’s basically now or never for the bulls. This level needs to be retaken and closed above if we are to see further upside in the market.

Starting with Sunday night, I would say that overnight inventory is mixed coming into today’s session. Am also noting that the ONL is quite lower than where we are now thus there is at least some lack of sellers out there. That’s an important carry forward as the market has been up for 6 sessions coming into today.

2723.75 which is Friday’s RTH low is my main upside reference. More bearish if we stay below that level, less if we do not.

There is some decent excess on the 2/16 high so for now we must assume that it is a “good” or secure high. Remember that these references may be short or long term in nature. We can only know from this information that the up auction ended properly. We do not know at this juncture how long the down auction will last or if another up auction will commence.

As always context is king and will save your life over and over if you know what to pay attention to….

Have a great day,
peter

Market Profile Analysis of S&P Futures – 02.16.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

No commentary today, I’ll be back Tuesday, February 20th

Market Profile Analysis of S&P Futures – 02.15.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

No commentary today or tomorrow. I’ll be back at it on Tuesday morning, the 20th.

Market Profile Analysis of S&P Futures – 02.14.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

www.windotrader.com/shadowtrader – click to enlarge

Futures swooning upon the 8:30 release of CPI data which showed prices getting hotter than expected. Inflation moving higher implies more rate hikes implies lower equity prices.

The market profile from yesterday is split into two distributions, both of which I’ve put boxes around. The general rule is to treat each distribution as a separate day. The tops and bottoms of any spikes that separate those distributions are always looked to as possible turning points.

Futures are currently trading just inside of yetserday’s RTH range after moving definitively lower than that level on the release of that 8:30 number. The are doing so on the tails of overnight inventory being skewed pretty hard to net long. Note how almost all of the activity before the recent spike down was above yesterday’s settlement level.

Carry forward that yesterday’s double distribution is a sign of poor structure on the way up. Overall my take on the recent buying is that it has been of the short covering variety and not the more potent combination of new money buying and short covering. The double distribution proves that nicely.

Have a great day,
peter

PS: The Valentines Day Discounts on the upcoming James Dalton Intensives expire tonight at midnight. Click on the gray banner at the top of this post to get the coupon code.

Market Profile Analysis of S&P Futures – 02.13.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

market profile

www.windotrader.com/shadowtrader

Double digit gap down this morning back into yesterday’s RTH range. Gap rules do not apply.

Overnight range is entirely inside of yesterday’s range, indicative of balance here.

Overnight inventory is net short but not 100% so. Am noting that we are trading well below halfback in the premarket.

There is little to say here as there are not that many references when the profiles are very large and stretched out. If we know that yesterday’s RTH low was a pullback to be bought as there were obviously more shorts to cover, then this is a downside reference at 2620.00. Am also noting 2639.50 which is VAL. A failure to hold VAL is more bearish.

I send out intraday notes via text message to the premium subscribers of both of our Options Advisories, sometimes multiple times a day. This is the best assessment of where we are right now that I can offer you.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 02.12.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

Sizeable gap this morning commensurate with the recent rise in volatility. Get used to it, it’s the new normal.

Overnight inventory is 100% net long. Note that the ONH is quite far from where prices are currently trading. The RTH high from Friday at 2637.75 will be in play today as the first reference point. We are currently trading just above that level. Will futures stay out of range on a true gap or will we open back inside balance. Once we open either way, will we stay out of range or remain in range. Go in and pop back out? Etc, etc, you know the drill.

The buying on late Friday was short covering. Larger players don’t get active late day like that and drive the market straight up without pause.

Friday’s halfback at 2584.00 is to be watched today as Friday’s range was extended. A stronger market will either not test halfback at all or will reject back upwards immediately upon testing it. A weaker one will test it and find acceptance below it.

We’re due for some sort of balancing day where the range would be a bit more compressed. We may not get that but am noting that we are due for it.

With the rise in volatility both responsive and initiative trade should be working. Remember that stops and targets should get widened out now. Note in the chart below how the 14 period ATR of the /ES has doubled recently.

CLICK TO ENLARGE

I have more detailed comments on where I believe the markets stand right now in my weekend video below:

Have a great day,
peter

Market Profile Analysis of S&P Futures – 02.09.18

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

www.windotrader.com/shadowtrader

Apologies for the late start this morning, we had some internet issues in the office.

I expected that we would open flattish today given the 100% retracement from the top of the bounce to the initial down move. The dow was also down 1,000 yesterday which is generally unsustainable and usually needs some balance afterwards.

Overnight inventory is net long but not 100% so. Am noting that the ONL did’t go lower than the RTH low.

2630.40 is halfback of yesterday’s range and could be in play.

Overall, I expect volatility to come in a bit today and we have a relatively rotational day around SPX (cash) 2600.

Have a great day,
peter

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