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Market Profile Analysis of S&P Futures – 02.12.18

By
Peter Reznicek
Founder, Editor in Chief

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

Written by 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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