Peter’s Premarket Perspective – Friday, January 10, 2020

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESH20 and /NQH20 Futures are posted free every morning

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  Key Levels for Today
3287.00 ONH
3276.75 RTH High (Poor)
3273.00 POC

 

Gap higher once again as we remain in this melt-up phase coming into the Q4 earnings period. /ES +4.00 currently on a true gap higher, putting gap rules into play. We are quite far off of the ONH currently which is one of the first things I noted when looking at the overnight distribution.

Yesterday’s fade to close the gap as expect with minimal motion back within the prior day’s range. I expect the same today. Short term players can, of course play for the gap fill given that overnight inventory is 100% net long. The usual trigger by failing to take out the ONH early would be your M.O., targeting yesterday’s RTH high.

Being once again in all time high territory leaves me with less to say. I continue to be biased long and see no signs of any sellers stronger than the occasional liquidation break. Internals have not been as bullish as I would like on these advances and I am continuing to carry that forward. Additionally, the structure on the last two RTH sessions has not been that supportive of further advance. As I said in yesterday’s report, these are data points against a currently very bullish context so keep things in perspective.

  Scenarios

  • Being that we are well off of the ONH currently (that can change by the time you read this!), the potential to fill the remaining part of the gap is there. That trade would probably develop very early if at all. If that’s the play, monitor for continuation into the RTH range and target the POC for further gains.
  • A market that fades only slightly and wants to at least hold the overnight range if not go even higher, will have a NYSE tick opening strong that won’t breach the zero line for most of the morning session. If such a gap and go scenario should develop, longs targeting the ONH can be taken with stops under LOD or just inside of the RTH high.

 

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Peter Reznicek

Peter Reznicek is the founder of ShadowTrader.net and writer of Peter's Premarket Perspective, a morning market profile blog to help people plan their trading day and organize their thoughts before the market opens. He can be reached at asktheshadow@shadowtrader.net.

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