The Market Profile value areas and ShadowTrader Pivots for /ESZ19 and /NQZ19 Futures are posted free every morning
in the ShadowTrader Swing Trader newsletter.
In yesterday’s Premarket Perpsective, I focused on the four day balance and it’s end points above and below. Yesterday’s RTH activity was not able to breach either of those points, but overnight trade this morning has and we are currently trading just out of balance to the upside. Although the gap is small, it is a true gap and thus gap rules are in play.
Overnight inventory is quite balanced this morning and that may bode well for bulls as there will be less imbalance to correct once the bell rings.
Today’s session will be all about whether or not we find acceptance above the balance area or not. At this point, I believe the market should not reenter that area at all and hold above. I’ve noted the high of the balance area in the Key Levels above. Note that it is also almost identical to yesterday’s RTH high. This is the key downside reference for today’s trade.
After five sessions of unchanged value, I believe it is extra imperative to watch where value develops today.
- Breaking out of a five day balance gives potential for a move higher today. I will focus on whether or not we can stay outside of the range in early trade and be biased to the long side if so. Note that any early upside trade will probably be within the context of the overnight range so location is key. An easier setup this morning would involve some minor corrective activity to test the upper bound of the balance area which could be used as excellent long trade location with a tight stop.
- While I think downside trade has less potential to happen this morning, I would consider it only on very negative internals that take price back into range quickly and start to move and hold below settlement.
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