The Market Profile value areas and ShadowTrader Pivots for /ESH20 and /NQH20 Futures are posted free every morning
in the ShadowTrader Swing Trader newsletter.
The prior all time high which was in an overnight session was taken out again yesterday proving that we are still firmly in the “do what works while it does” phase rather than the “until it doesn’t”.
Structure was just so-so and so were internals. I hope you all notice that while I carry that data forward, I don’t make it my main focus which is to pay attention to context, seasonality, and overall tone. That’s important. Where are we in relation to recent ranges? What time of year is it? Are liquidation breaks swift and short and being bought back up very quickly thereafter? Those are what should be dominating your narrative currently. When you are in a trend, those are what matter. When you are more rangebound, that’s when the market profile nuances shine more.
As the /ES is trading at a new all time high in the overnight session, there is little to report. Halfback is listed purposely as a Key Level since yesterday’s RTH distribution was nicely elongated. A stronger market should not breach halfback, especially on a breakout day. That being said, I would like to see value at least overlapping to up today to confirm acceptance of these higher prices.
- As the gap is double digits, pay close attention to gap rules #2 and #4. The potential for a fade is there as it always is on any true gap but that doesn’t mean that context will come in to support it. Again, #2 and #4 tell you everything you should be thinking when the bell rings.
- The high was poor yesterday but the close was relatively weak and prices went a tad lower in the overnight session. That tells me that the initial reaction to the poor high which is to back away may already be done and now the trend can resume. For that reason, I think the potential for prices to be supported early is stronger than the potential for a fade and the long bias will probably be the easier trade. That can develop in a number of ways from either a trigger over the ONH with stop under LOD, or by buying any small fade that either comes in partially or fills the gap fully and is a buy at the RTH High. In either case, monitor for continuation higher as there is no upside reference.
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