The Market Profile value areas and ShadowTrader Pivots for /ESU19 and /NQU19 Futures are posted free every morning
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|2883.75 – 2900.75||Single Prints|
|2847.00 – 2834.00||Spike|
**Am traveling again and have early meeting this morning so again this report is being written earlier than normal. There could be a large difference between where I am seeing overnight prices now and 9am EST**
Very wild futures action overnight since the 6pm EST Sunday open where we were down 40 handles in a flash and are now trading higher by about 14 as of this writing at about 5:55am EST. Sensitivity to tariff/trade war news is extremely high right now and with volatility so elevated these swings are quickly becoming the norm. Remember to adjust your targets and stops accordingly regardless of your timeframe outlook.
Whenever there is a large expansion of range in a prior session, my first reference point is almost always halfback. Think about that for a moment. It’s not just an arbitrary level. It’s the exact level where those proven to be wrong or right become a majority. Think of it as a tipping point. Currently we are trading above the settlement and below halfback. So my first thought this morning is that there will probably be a little clash between those covering shorts because are above the open and those adding to them because we are below halfback. Within those last few phrases is encapsulated my entire trading philosophy. Figure out the key levels and then decide if crossing them will embolden one side or the other. Then apply context to that.
The next area that is of importance is Friday’s RTH low. If halfback is the tipping point where a majority becomes wrong or right, then RTH low or high of a trending day is where that majority becomes close to 100%. Huge piece of market generated information there….
The last two areas of importance today are the single prints in Friday’s distribution. There are two sets of them and one is a spike which puts spike rules into play. To refresh, a spike is when you have single prints into the last one or two periods of a session. While we didn’t close near the lows, note that there was a large excess made in “N” period which is the last TPO period before the shortened “o” period. Both sets of single prints should be considered today both for their short and longer term implications; the upper single prints being a more short term signal and the spike being a more longer term one. In a nutshell, extremes of single prints are often marked off as intraday support or resistance and how we trade in relation to spikes often determines slightly longer term direction as the spikes are either accepted or rejected.
As there are always limitations to every chart view (profile. candlestick, point and figure, whatever…) I leave you with a more traditional chart of the /ES that shows the overnight action and more importantly where the trendline lies that connects the Sunday night lows. This chart is self explanatory and should also figure into your analysis today.
I’ve said a lot here and I think it’s of huge value. I’ve noticed that many of you have taken a free trial for the first time over the weekend. I sincerely welcome you and I hope that my daily writings will inspire you to look at price action with a more discerning eye and lead you to greater market understanding which you can leverage to your advantage.
- Overnight trade is in a very large range and trading between halfback and the settlement. Given that and the current levels of volatility, I would be looking for slightly later rather than earlier trade today. That being said, gaps up against bearish prior days often fade from the open especially when overnight inventory is relatively balanced as it is today.
- The ONH is marking inside of the single prints. A breach of it on strength would put the rest of the single prints into play on up to their top.
- Any balancing relatively close to the settlement that doesn’t breach the extremes of the overnight range should be carried forward as bearish. I would also think that acceptance below today’s settlement will embolden sellers and potentially bring more of them to the party.
Have a money Monday,
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