The Market Profile value areas and ShadowTrader Pivots for /ESH19 and /NQH19 Futures are posted free every morning
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Good Morning
If you are here through Terry at WindoTrader, this is the final free issue. It’s been a pleasure sharing this information with you and I hope that I can count you as a subscriber in the near future. If you have any questions at all, feel free to contact me at asktheshadow@shadowtrader.net.
Some surprising news yesterday afternoon that the govt. is considering easing tariffs on China to calm the markets. S&P futures rallied hard on that, fell back to almost where they started, then commenced a slow climb higher which is still in effect as we go to press here. Let’s have a look at the marketIf ShadowTrader is initiating a position “at the market” it simply means that limit orders are not being used and the position is being entered with no regard to price. This is used much more ofte...<market profileA way of reading the market that recognizes either time spent or volume traded at a particular price level. A market profile can be either made up of “TPO’s” (time price opportunities), or volum... coming into today’s session…..
Purposely taking the snapshot this morning more close up so as to focus on yesterday’s structure. It was thin and emotional with an excess highA high characterized by a number of single prints that ends a move and is at the top of a daily market profile distribution. The minimum number of TPO's that is necessary to define an excess high is t.... The overnight session has moved above that RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. high and thus we will carry forward that we don’t expect that to be the high of the move. Could be, but odds generally favor auctions ending in RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. sessions.
Overnight inventoryA way of measuring overnight activity in the futures market by just noting how much of the overnight activity happens to fall above the prior day's settlement value (4:15pm EST close) and how much fal... is about 90% net long. 2649.25 is the ONHOvernight High. A term mostly used in describing the futures market which has an overnight session and trades almost around the clock. To be precise, in the /ES this is the high made between 4:30pm ES... and is the upside reference. An early failure to take it could result in a liquidation breakA sharp downward break in price that often seems to come out of nowhere and is usually short lived. It is caused primarily by short term traders inventory position getting overly long and initiated by... (fadeWhen a stock moves opposite the direction of its gap on an intraday basis) back through some of the single printsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no val... at the top of yesterday’s range. As of now we are trading on a true gapThere is a lot of discussion as to what constitutes a gap. Is it measured to the prior day's close, or to the prior day's high or low. Here at ShadowTrader we believe that it is always and only to a p... which is very small of just a couple of points away from the RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. high. If such a fadeWhen a stock moves opposite the direction of its gap on an intraday basis was to develop, target 2639.25 which is the base of the excess single printsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no val... and then VAHValue Area High at 2636.50. Further weakness would probably look for the volume POCPoint of Control, also known as the "fairest price to do business". It is the price level in the /ES where the greatest amount of volume in the prior RTH session traded. ShadowTrader measures the POC ... at 2635.00 and possibly halfbackA term for the halfway point between the high and low of any session, could be a day session or an overnight session. On Peter's market profile charts it is always a dark yellow horizontal line at tha... at 2625.50.
The volume was light for the later part of the session as shorts were squeezed on that news. Note the volume at the different price levels that runs alongside the distribution. Emotional short covering is what is happening there.
On the upside, there are two main levels which could be in play today if prices can move above the ONHOvernight High. A term mostly used in describing the futures market which has an overnight session and trades almost around the clock. To be precise, in the /ES this is the high made between 4:30pm ES.... Those would be the round number 2650.00 and the VPOCVirgin Point of Control. This is a point of control level that has not yet been tested (traded through) during an RTH session. If the POC gets tested during an overnight session, it does not count and... at 2652.00. It’s too far to the left to see, but this VPOCVirgin Point of Control. This is a point of control level that has not yet been tested (traded through) during an RTH session. If the POC gets tested during an overnight session, it does not count and... is from the 12/13/18 session. Both could be in play today. How the market acts around the key 2650 level will be of most importance today. My first inclination is that it will have difficulty resolving it. If it doesn’t then it’s a sign of strength or rather melt-up as the case may be. It is options expiry today so a grind around that 2650 on middling internalsInternals refers to “market internals” and is a blanket term to collectively describe the advance decline, breadth, tick and cumulative tick. could easily be in the cards for today’s session. Keep that squarely in mind if you are trading in the day timeframe.
Yesterday’s action was very interesting as it came right at some very pivotal technical resistance in the SPX and NDX. As I’ve been discussing in recent ShadowTrader Video Weeklies, the NDX is right at main down trend line resistance and the SPX was at a key Fibonacci resistance yesterday. The surprise news took both of those indices above those levels. We are also trading just inside the base of the “box area” that I talked about at length while it was forming in November. There should be resistance here but as of now it appears that it is being ignored. I’ll leave you with a daily chart of the SPX cash that hopefully gives more perspective on exactly where we are.
Many more nuances and details to come in this weekend’s video…….
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Beef up your "quad" and by putting your tickThe net cumulative tick reading on the NYSE or Nasdaq Composite. This is measured by the number of stocks ticking up minus the number of stocks ticking down at any given moment. It is the least used o... indicator on steroids!
Learn MoreHave a nice day,
-peter
