Peter’s Premarket Perspective | Tuesday, August 4th, 2020

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESU20 and /NQU20 Futures are posted free every morning

in the ShadowTrader Swing Trader newsletter.

premarket

WindoTrader 702-800-4628 Speak with Terry about the ShadowTrader discount

 

  Key Levels for Today
3297.75 ONH
3288.25 TPO POC (prominent)
3285.25 VAL
3276.50 RTH Low / Top of Gap
3267.00 Bottom of Gap
3226.75 VPOC (7.31)

 

August came out of the gate with more of a whimper than a bang as yesterday’s gap and hold failed to get any expansion of range and is being followed by an overnight gap down of about 13.50 currently. All this leaves the market threatening to return back to the “safe space” of the large balance area.

As of now the gap is outside of yesterday’s range by only a couple points. Thus it is a true gap but not one that would be large enough to create any shock and awe at the open. Overnight inventory is also very balanced with about an equal distribution on either side of the settlement. That also points to a potential later rather than earlier trade.

Yesterday’s TPO POC was prominent which makes it a Key Level for today. Prominent POC’s have better odds of being revisited than less prominent ones. Carry that forward into your narrative for today as it may set up a long trade targeting that POC. POC’s are places to end trades, not start them.

Pay attention to where value is developing today. Bulls need the market to get in gear here and stay higher than the recent larger balance area. Lower value does not help them achieve that and increases the odds that we return to balance and potentially rotate to the lower end of it.

  Scenarios

    • With the market currently about halfway between the top of the gap and the bottom of the gap, the early trade will be dominated by which extreme future decide to touch first. Betting on that via an early fade or continuation trade is probably a fool’s errand. The better trade is probably the responsive one against either extreme, given proper context.
    • Acceptance back within yesterday’s RTH range potentially puts the TPO POC into play as it is prominent. Monitor for continuation to that point. Not testing that POC today is a tell of market weakness.
    • Finding acceptance below the Bottom of the Gap increases potential for further downside as it would further confirm yesterday’s RTH session as a look above and fail. If so, retracements may be shortable with an ultimate target of the 7.31 VPOC.

 

 

James Dalton Field of Vision

James Dalton’s flagship market profile instruction

6.5 hours of digital video plus 128 page .pdf workbook

Exclusive ShadowTrader Discount

TD Ameritrade, Inc. and Shadow Trader Technologies LLC are separate, unaffiliated companies and are not responsible for each other’s services and products

Don’t Have a TD Ameritrade Account?

Do you put on a blindfold when you drive too? Open an account with TD Ameritrade today and get everything ShadowTrader has to offer including the live SquawkBox and more!

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.

View all author Posts