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Peter’s Premarket Perspective | Friday, May 22, 2020

The Market Profile value areas and ShadowTrader Pivots for /ESM20 and /NQM20 Futures are posted free every morning

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  Key Levels for Today
2976.255/18 overnight high/ 5/20,21 RTH High
2955.75Start of Single Prints
2933.00RTH Low
2915.50Top of Gap


Plenty of nuance to discuss in yesterday’s distribution not to mention the glaring piece of M.G.I. that is the continued failure to fill more of the gap. As I like to say, “without further ado, let’s get into it!”

As of now we are slated to open in balance. Overnight inventory is net short but not skewed enough to matter at the open, I don’t think. It’s the last bit of overnight analysis that is noteworthy which is to see how far away we are from the ONH or ONL. In today’s case, it’s the ONL that matters because once again the overnight trade has ventured into the gap which is a void of price support and rejected back higher into range. That is a classic WWSHD moment and should be carried forward.

Moving to within the distribution I am seeing that there are some single prints at the top which has formed the shape of the distribution into a lower case “b”. B stands for liquidation BREAK. Imagine if there was a Sesame Street episode that was devoted to market profile.

Single prints are always to be carried forward into the next day as potential resistance points. If prices can get up to the start of that skinny section of the profile, there is potential that the area will be resistant.

As there seems to be a whole lotta back and forth lately it would be good to step back and look at a daily at this juncture. Let’s use SPY since we know that it is trading hours only which is what matters most.

SPY Daily with Fibonacci Retracement and Moving Averages

I’ve marked up the chart to show what I believe are the three most important technical nuances that the market is focusing on right now. The market has rallied off of the lows and taken a couple of attempts to break above the 61.80% Fibonacci resistance. In finally taking it out it did so on a monster gap higher that has since held and is now balancing for four sessions. The 200 day SMA just above which ties in with the round 300 level (3,000 in SPX) is just above the balance area and is the obvious target for the market.

When looking at a daily chart which zooms out a bit, we can see that the technical picture is still pretty bullish as the gap remains unfilled and the market has been trading in a relatively small range just above the 61.80% Fib level.


  • I am considering the last four sessions as a large balance area and thus balance rules are in play. I know that any activity within the balance area may be responsive and that the market has been very susceptible to liquidation breaks within the area.
  • On any strength today, my focus will be on the single print area at the higher end of the distribution to see if we can trade through it and get to the recent multiple touch resistance of the first Key Level above. I will treat this level as a breakout point and assume that the market is targeting SPX 3,000 on any acceptance above this level.
  • Taking out the RTH Low has less import today since it is not the low of the balance area and I know that the ONL is well further down. While I am working from the framework that there are not stronger sellers inside of the gap (or else it would have filled more already), I stand ready to change my intraday (and potentially longer term) bias if we find acceptance below the ONL. In such a scenario, the full gap fill (2859.50) would come into play.


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