Peter’s Premarket Perspective | Wednesday, June 2, 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 Balance In Balance
Overnight Inventory Balanced
Current Price/Overnight Range In upper third, close to ONH
Shock and Awe no
Potential for Early Trade no
Short Term Bias bullish
  Key Levels for Today
4230.00 RTH High
4210.25 Bottom of Single Prints
4198.50 O/N Halfback (prominent)
4190.75 ONL
4173.50 Low of Balance

Ongoing Narrative / Commentary

Small gap higher but still well within range.  Gap rules are not in play and the higher odds plays will probably develop later rather than earlier in the session.

Yesterday’s activity represented a look above and fail as per the balance rules.   This means that there is potential for rotation to the opposing end of balance which is listed in the Key Levels above.  Remember that potential doesn’t mean surety.

I rarely discuss overnight distribution patterns unless there is a 45 degree line.  I believe we have one of those in last night’s market profile.  I listed the widest part of it in the Key Levels only because it was so prominent.  It could represent overhead supply from Globex traders if we were to move below it.  Certainly, the 45 degree line is at odds with the balance rules thesis that we should move to the low end of balance as it represents a lack of sellers  at the ONL.

  Scenarios

  • The overnight 45 degree line is at odds with yesterday’s weak close.  This could be setting up a WWSHD move higher.  Use the bottom of the single print as a potential signal of strength for long bias.  
  • On weakness, watch the O/N Halfback area to see if we can get  any acceptance there.  If so, the odds increase that we move towards the ONL and potentially to the low end of balance.
  • As always, don’t discount the potential to hold within balance.  This would be probably signaled by range bound trading that doesn’t find acceptance above or below either of the Key Levels within yesterday’s RTH range listed above.  
 

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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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