Peter’s Premarket Perspective | Wednesday, May 12, 2021

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESM21 and /NQM21 Futures are posted free every morning in the ShadowTrader Swing Trader newsletter.

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  Pre market indications
Opening In/Out Balancein balance
Overnight InventoryNet short
Current Price/Overnight RangeIn lower third
Shock and Aweno
Potential for Early Tradeno
Short Term Biasboth /ES and /NQ now below 20ma
  Key Levels for Today
4178.00Top of Gap
4156.25RTH High / Bottom of Gap
4130.00Halfback / VAL
4103.75RTH Low
4095.50ONL

Ongoing Narrative / Commentary

Gapping back down into yesterday’s large range.  While yesterday’s rally and relatively strong close seemed bullish, an objective look at M.G.I. may show otherwise.  Firstly, yesterday’s large gap was not filled.  It was filled partially but still left a very large void above the RTH High.  Value was clearly lower in a breakaway fashion.  Last night’s overnight activity stopped right at VAH, indicating that sellers are still in control.  Recent CPI data release also took prices below the RTH Low for a short period.  Carry that forward as price exploration.

As the ONH stalled at VAH, I will trade from the framework that sellers are dominant and rallies should be sold unless we find acceptance above that level.  Carry forward yesterday’s RTH Low as it was at a very technical level that is visual and mechanical for all traders.  That could make this low weak should it be revisited.

  Scenarios

    • Early indications offer little in the way of directional clues at the open. The better trades will probably develop later rather than earlier in the session.   
    • As discussed above, I will assume a more bearish stance as long as prices are below VAH.
    • Carry forward that the ONL breached the RTH Low and thus that prior support level from April. Carry forward that for now those lower prices were rejected, however overnight trade has less import than RTH trade. Retesting the ONL would be a bearish signal and potentially put the daily 50 SMA into play on the /ES in the 4040 area.

 

James Dalton – Markets in Profile

For those who want to go deeper into the auction process, the follow up to Mind Over Markets by James Dalton

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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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