Peter’s Premarket Perspective | Monday, April 19, 2021

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESM21 and /NQM21 Futures are posted free every morning

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  Key Levels for Today
4183.50 RTH High / ATH
4160.50 RTH Low (Weak) / ONL
4154.25 ONL 4.15 (Weak Low)
4149.50 Top of Single Prints
4137.50 VPOC 4.14

 

Gap lower this morning but still well within range. Not a true gap and gap rules do not apply. Overnight inventory is close to 100% net short and current prices are just above overnight halfback.

I think the first thing we have to add to our narratives is that Friday’s weak low was only taken out by four ticks in the overnight session. This is a WWSHD moment to carry forward. The low was weak, it should have triggered a lot of sell stops, but it didn’t. In early trade today, assume that it is secure.

Should we get further selling that takes out that ONL, make careful note of the structural nuances just below, all of which are listed as Key Levels for today. Work sequentially and targeting only one at a time before moving on to the next trade unless the internals are overly bearish and tempo is elevated.

On the upside, I’ve only noted the RTH High as a Key Level because there is obviously no resistance above that level and anything between where we are now and there is not of major import.

Don’t make the mistake of assuming that if the ONL is secure then the move has to be higher. Balance is a valid outcome and at this stage of the rally would be very healthy for the market. As we often discuss in this space, shape and size of the overnight distribution can often set the tone and for the day timeframe that follows.

  Scenarios

      • The failure of sellers to get any real traction below the weak low is noteworthy and should be foremost in your thinking this morning. Pullbacks above that level should be buyable.
      • The overnight distribution is relatively squat and current prices are at overnight halfback. This points to balance inn the RTH session as a potential outcome. If so, smaller responsive trade is the M.O. for day timeframe and holding your positions without adjustment is the M.O. for longer timeframe.
      • Should the RTH session be wildly different in tone from the overnight session and take out the RTH Low on fast tempo and very bearish internals then comport yourselves accordingly, noting my commentary above. The current overall tone doesn’t support this however every potential should be on the table whenever you trade.
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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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