The Market Profile value areas and ShadowTrader Pivots for /ESU19 and /NQU19 Futures are posted free every morning
in the ShadowTrader Swing Trader newsletter.
Gap up of about ten handles currently on the /ES which is a true gap and thus gap rules are in play. Overnight inventory is very balanced which takes some of the force out of that gap as far as any shock and awe that may occur at the open. It is when overnight inventory is more skewed in one direction that there is greater potential for a swift early (playable) move in either direction.
Yesterday I made a lot of mention in my What’s Peter Thinking audio clips of the prior day’s halfback and settlement and how almost all of the trading range was between those two key levels. This morning’s trade is slightly higher with some prices pushing into that range of single prints from 8/23. I am carrying forward that for now we have not run up into the top of those prints. To me, that should have happened already and a stronger market would have done it as there should be little resistance in that area.
Yesterday’s profile was definitely of the balancing variety which is evidenced by it’s very symmetrical shape and POC dead in the middle, just above halfback. In the bigger picture that is bearish. The tide can turn anytime it wants, but we can only go on what M.G.I. we have at our disposal and for now it’s still bearish with that value unchanged yesterday.
- As with any true gap, the potential for a fade is there. As I mentioned above, that potential is lessened when overnight inventory is not 100 net long. That being said, with value unchanged yesterday that potential may still show itself and I would be ready for it if the ONH isn’t taken out early.
- As with any true gap, the potential for a fade is there. As I mentioned above, that potential is lessened when overnight inventory is not 100 net long. That being said, with value unchanged yesterday that potential may still show itself and I would be ready for it if the ONH isn’t taken out early. As always, first target would be to RTH High for the gap fill, then monitor for continuation.
- I would not look to play any short covering rally higher today unless the ONH was taken out early on strong tempo and internals. If that is the scenario, then first target is to the top of the single prints. If this is the case, watch closely to see how value develops. Value needs to follow price higher if anything more lasting to the upside is to develop.
Have a great day,