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Market Profile Analysis of S&P Futures – 11.21.17

Market Profile Analysis of S&P Futures – 11.21.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

Two days of unchanged value and TPO/volume POC’s almost identical as well.

Small body with range compressed for second day in a row. Both of the last two RTH sessions have a lack of material excess to them. There is also a TPO VPOC at 2586.75 above us which will probably be tested if the RTH high of yesterday is cleared at 2584.00. Remember that poor highs make markets back off and then they get repaired once trade brings prices back up to them, which is what we are seeing this morning in the overnight session. S&P futures are up 10.00 and Nasdaq 100 are ahead by over 30 at this juncture.

Overnight inventory is more balanced than net long even with the large gap. The gap is a true gap and as such gap rules do apply. We are currently slated to open outside of balance.

When trading an open like this, think of the scenarios that can happen. Gap and go? Gap and fail? Hold sideways? When the gap is double digits in the /ES, I tend to favor door number 3. Larger gaps take time to “digest” and often offer little trading opportunity early in the day timeframe. Once things shake out a bit and the market shows it’s hand then higher odds setups tend to present themselves. I know from experience that it’s the size of the target that tends to throw a wrench in our works. You see that we are opening up +10 and you think that if you just short the open you can make all ten points when the gap fills. What goes up must come down, right? Gravity should pull prices at least part way into the gap, right? Even if it only comes in three points, I could still make three points right? Does any of this sound familiar? Do you remember how it turned out all those times you tried it? Give it some thought before the bell rings…..

I’ve marked off the two highs that are references for today’s trade. They are the all time high made in an overnight session and the highest RTH high. Both are probably in play either today or over the next few sessions.

Mind the gap……..
peter

Market Profile Analysis of S&P Futures – 11.20.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

CLICK TO ENLARGE

Overnight inventory net short, not 100% so. As of now we would be opening squarely within balance on a small gap higher.

Friday’s value area and overall range were very tight, indicating balance at these levels. It was an inside day.

The TPO (and volume for that matter) POC from Friday at 2580.50 is quite prominent. As such it may be in play today.

2567.75 is the ONL and downside reference for today.

There is little to say about the profile and overall action as it is status quo for now. All levels to be carried forward from prior blog posts should continue to be carried forward.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 11.17.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

Balanced overnight action with a nice 45 degree line from the ONL to its widest portion indicating that nighttime sellers were trying to take it down but had little success and will probably end up stuffed in early trade today. When will these silly bears learn? Hopefully never as far as I’m concerned!

Overnight inventory is looking about 85% net short or so. Currently we are trading on a small gap down and slated to open within balance, obviously.

The ONL is at 2579.50 and there are some single prints down there in yesterday’s poor structure distribution which resembled a “p”. Early traders yesterday were just hitting the buy to cover button or letting their stops get triggered.

Value yesterday was established back up above the five day mild downtrend that just ensued.

I’ve marked off the all time RTH high and the actual all time high which was made in an overnight session, above. Yesterday’s action puts this back in play again and odds favor that the overnight peak will be bested in a day session at some point.

Have a wonderful day,
peter

Market Profile Analysis of S&P Futures – 11.16.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

CLICK TO ENLARGE – www.windotrader.com/shadowtrader – CLICK TO ENLARGE

All I can say is I’m not surprised at all. I’m pretty longed up and haven’t made any adjustments to my positions over the past week of much “sideways to downness” Even if you don’t care to understand the nuances of market profile you can get to pretty much the same place by simply asking the three questions over and over multiple times per day. What is the market doing? What is the market trying to do? How good of a job is it doing getting there? The past week could be answered by: going down, trying to go more down, crappy.

That is the recipe for the gap higher today. When the answer to the last question isn’t a resounding “great” or “awesome”, the market is probably going to reverse in the other direction soon.

The 2578.25 poor high is the first upside reference which we would be looking for the market to clear and give some repair to that poor structure.

As of now we would be opening outside of balance (yesterday’s RTH range) and as such gap rules apply.

The market continues to trade in a responsive manner dominated by shorter term trade. Notice how the ONL is dead on VAL and the ONH is right to yesterday’s TPO POC to the penny? In looking at that overnight high, I don’t expect it to hold if we get some strength because who would be selling right at a POC? Insomniac busy bodies who will cover their shorts immediately when they stop going their way.

Have a wonderful day,
peter

Market Profile Analysis of S&P Futures – 11.15.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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.

For those of you who haven’t heard yet, Scott Gillam and I have been running a couple of options advisories for the past couple of months. One of the things that’s included with every subscription is an end of day recap of all the trades that were sent out via text message and also a daily commentary on how we closed and what we might expect the next day. Here’s what the subscribers received yesterday at 4:30pm EST.

Weekly Options Advisory

I’ve boxed off and underlined the important part. Often you will hear me talk about developing poor highs or poor lows but it has so much more import when it’s the basis of a market call before it happens. Simply put, these poor highs are very powerful signals that buyers are trapped at bad prices and some inventory will need to correct. Let’s have a look at it on the market profile distribution.

market profile

CLICK TO ENLARGE

The distinct lack of excess at the top of yesterday’s RTH range coupled with the fact that the 4:15pm EST settlement is very close to the high makes the situation ripe for a correction. That’s why I wrote what I wrote in the daily update. The poor high also has a second dynamic to it which is that it needs to be carried forward as a poor structure area that needs repair. 2578.25 would be that level and it’s a long call over that price.

There are multiple signals back and forth where short term trade is getting too short and then too long and market profile nuances continue to work well. Note how the ONL is right down to that first VPOC below from the 10/25/17 session. Literally to the tick. They got too long at yesterday’s close and then too short overnight. Emotional swings continually as the market balances. That ONL at 2562.00 is a key downside reference as it was also an RTH low from the 11/2/17 session.

Overnight inventory is also 100% net short coming into this morning’s open double digit gap. As big as it is, gap rules do not apply as we will be opening within balance. Overnight sellers thus far have failed to keep prices outside of yesterday’s RTH range. I am carrying that and the inventory position forward into the close. An early failure to get lower and take out the ONL will increase the odds of a short covering rally.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 11.14.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

click to enlarge – WWW.WINDOTRADER.COM/SHADOWTRADER – click to enlarge

S&P futures trading on small gap lower inside of yesterday’s RTH range. Overnight inventory is 100% net short.

Yesterday’s distribution was a classic “p” formation indicative of short covering at the open. Note the single print spike that defined early trade.

Value has been unchanged for three sessions now. Assume the market is balancing for another move higher. The all time high was made in an overnight session and there is a lack of material excess on the all time RTH highs. For now we should assume that the up auction has not ended.

As tedious as it may be, continue to carry forward everything until it is traded through.

Have a great day,
peter

Market Profile Analysis of S&P Futures – 11.13.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

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Currently gapping down 5.75 to just inside of the low end of Friday’s RTH range. This is more than likely due to Friday’s poor high which has a few short term longs trapped at poor location. The overnight high cleared that poor high but it is not considered repaired unless it is crossed during an RTH session. Although we are gapping, it’s not a true gap that is outside of the prior day’s RTH range so gap rules do not apply.

Value was unchanged on Friday and the range and value area were relatively tight.

Overnight inventory is very balanced with an about equal distribution on either side of the Friday settlement. 2584.50 and 2571.25 are the overnight high and low and should be considered the upside and downside references for today’s trade. 2562.00 is the first VPOC below us.

Have a wonderful day,
peter

Market Profile Analysis of S&P Futures – 11.10.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

CLICK TO ENLARGE www.windotrader.com/shadowtrader CLICK TO ENLARGE

Yesterday’s action saw a sharp early liquidation break which was negated by buyers into the setlement which was right at the top of the range. Currently S&P Futures are gapping down 6.50 and trading in the meat of yesterday’s range which was large. Thus first inclination is for an inside day. As such, trade would be responsive rather than initiative.

Overnight inventory is net short but as there is no gap outside of the prior day’s range, there is little to do with that information.

Yesterday’s distribution has an excess low and also a high with a lack of material excess.

The best thing you can do right now is continue to ask yourself the three questions:
What is the market doing right now?
What is the market trying to do?
How good of a job is it doing getting there?

The extremes of the VA could be trade locations today. VAH is at 2584.00 and VAL is at 2573.50. That VAL is just one tick below halfback which makes it more of a possible turning point.

Monitor where value develops today. Obviously inside of yesterday’s is just status quo. Outside has a lot more import. Lower continues to bring the rally into question, higher sets up an assault on the 2594.50 all time high which was made in an overnight session.

Have a wonderful day,
peter

Market Profile Analysis of S&P Futures – 11.09.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

CLICK TO ENLARGE – www.windotrader.com/shadowtraer – CLICK TO ENLARGE

Double digit gap down outside of yesterday’s RTH range so gap rules apply. Largest overnight move we’ve had in awhile so we’ll pay attention early to see if sellers come in or if it’s the usual buy the dip situation.

2575.50 and 2581.50 will be the two levels to pay most attention to in early trade. The first is the ONL and the second is yesterday’s RTH low. The market will speak volumes depending on how it reacts to these levels. Take out ONL and come back up, take out ONL and drive lower? Rally to RTH low and reject, rally to RTH low and begin to find acceptance within yesterday’s range? Price by itself is meaningless; price relative to context is everything.

Gap rules apply:
1. Go with all gaps that don’t fill right away.
2. Larger gaps will often not fill fully on the first day. Note: although we are gapping 13.50 currently, this is measured from yesterday’s settlement which was at the top of a pretty large range. The true gap is the distance between where we open and yesterday’s low which is only about 4 points currently.
3. If the gap fills and value cannot get to at least overlapping, then the odds of afternoon selling increase.
4. Double digit gaps are harder to trade than smaller ones. It often makes sense to lay back and let things shake out a bit before trading /ES.

On further weakness, the first VPOC below us is the TPO one from 11/2 at 2573.00. Note that the volume POC on this date was traded through but the TPO one was not. The next VPOC down is 2562.00.

Have a nice day
-peter

Market Profile Analysis of S&P Futures – 11.08.17

Value Areas and POC figures for /ESZ7 and /NQZ7 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

Overnight inventory is 100% net short. Overnight action took out the RTH low but has since rallied back into range. As of now we would open within balance on a small gap lower. S&P and Nasdaq 100 futures are split red/green. I tend to carry that into the regular session as it often leads to an inside day.

Value was unchanged yesterday as we double topped right at an overnight high (2593.50). Those are mechanical sellers of the short term variety. As such I expect that the top is not in yet.

2579.75 is the downside reference for today’s trade at the ONL. Acceptance below that level could put the TPO POC from 11/2 into play.

Overall, I am expecting further balance before another push to new highs.

Have a great day,
peter

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