Market Profile Analysis of S&P Futures 01.10.19

Peter Reznicek

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Good Morning

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The 45 degree line in the overnight trade is significant. As always, not as significant as if it happened in an RTH session but significant nonetheless. Think of the bottom point of the pattern as the corner of a room. Sellers are the painters and they have painted themselves into the corner. The only way out of that is to jump the other way. 2560.50 is the ONL and has some decent odds of holding today, given the pattern.

Overnight inventory is 100% net short which also bodes well for an upswing early today. Currently we are trading just at yesterday’s RTH low at 2569.00. That and the aforementioned ONL are the downside references that will be most important in today’s session.

In the wider view, I still believe that buyers are setting themselves up for a fall soon as I’m just not seeing any real confidence out there. In yesterday’s RTH session we made a higher high again but the tone was more rotational than trending and the volume POC failed to migrate higher. That being said, I don’t see any indication that the up auction is definitively over yet either. Yesterday’s excess high was a scant 4 ticks, so if that was it, then we are truly going out on a whimper rather than a bang. For what it’s worth, I’m just not seeing it yet. As I discussed on the ShadowTrader SquawkBox with Scott yesterday, I’d rather see some real excess or a very poor high which would both indicate a significant number of buyers at poor location that would then kick off the firecracker effect of stops. For now the market is still trading like it’s on a mission to tag the round number 2600.

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Have a nice day,
-peter

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Peter Reznicek

Peter Reznicek is the founder of ShadowTrader.net and writer of Peter's Premarket Perspective, a morning market profile blog to help people plan their trading day and organize their thoughts before the market opens. He can be reached at asktheshadow@shadowtrader.net.

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