The Market Profile value areas and ShadowTrader Pivots for /ESU19 and /NQU19 Futures are posted free every morning
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|2990.25||RTH Balance Area High|
|2981.25||Prominent TPO POC from 9/6|
|2957.25||New Top of Gap / Balance Area low|
Yesterday’s action gave us a good amount of M.G.I. to add to our narrative, mostly in the form of a look below and fail which took prices into the gap but still left a large portion of it unfilled. As always pay attention to what should happen and then note when the opposite happens. What should have happened is that new sellers should have been attracted once the top of the gap was pierced. It was like a party that started off pretty good and then some fool said “Let’s play charades!” and it fizzled quickly from there.
Which brings us to current action overnight which is a small true gap higher on overnight inventory that is almost perfectly balanced. Beyond that, the open is slated to be in the larger balance area, in fact right in the meat of it where the prominent POC printed from three sessions ago. This means that if you are an /ES cowboy (or cowgirl) you will probably want to trade later rather than earlier as there is no “shock and awe” to overnight inventory and the open is smack dab in the middle of the larger balance area. I honestly cannot stress that last sentence enough. I know from my own experience and thousands of emails from traders that one of the things that is most detrimental is thinking that just because you have heard that familiar 5 tone bell ringing, there must be something to do and it must be done now. Pavlov would be proud, and there will probably be responsive setups later in the morning if we remain within the larger balance area.
In the bigger picture the balance area is still intact and the balance area high and (new) top of the gap are still our reference points. Anything between is noise.
- Balance rules are still in play. There could be some push/pull today as the volume POC never migrated higher with price yesterday closing at the high, against the context of some shorts probably trapped from the look below and fail. Given those two nuances, I put more weight on the trapped sellers and would continue to favor longs.
- As usual, only a breach of the top of the gap which is the new balance area low would bring upon potential for change.
Recording of the market profile Q&A from yesterday…
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