Peter’s Premarket Perspective | Friday, August 6, 2021

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESU21 and /NQU21 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 upper third
Shock and Awe yes
Potential for Early Trade yes
Short Term Bias bullish  – breaking out of large balance area
  Key Levels for Today
4429.50 ONH
4422.75 RTH High / ATH
4416.00 ONL / 45 degree line low
4411.75 TPO POC (Prominent) 
4391.25 Weak Low (8.4)

Ongoing Narrative / Commentary

Yesterday was day 10 of balance, and a relatively tight range day at that with a very small value area.  The TPO POC was prominent as well and should be carried forward.  

The overnight session has broken out of the balance area on the strong NFP report, however the overall Globex range is very balanced and also has a 45 degree line from low to widest point.  Carry forward all of this in your narrative.  

Balance rules continue to be in play, especially given that premarket indications have us breaking out of balance to the upside.  Remember that it’s only what happens in the RTH session that matters.  

Although we are opening within balance, I am calling for shock and awe and the potential for early trade in the premarket indications due to the economic data and the fact that all eyes are on this breakout level.  Aggressive traders can potentially be short early against the ATH.

Lastly, note how relatively weak the /NQ futures are in relation to the /ES.  The divergence is pretty staggering.  The /ES will need the /NQ’s to get in gear if it wants to sustain a breakout here and have a true “look above and go”.

Scenarios

  • Your main focus today should be on the RTH High which was a double top at the ATH from a previous session.  As I write this, we are currently trading right at that level.  If the market cannot sustain the breakout, balance rules tell us that there is potential for rotation to the opposing end of balance.   Assume strength above this level and weakness below.
  • Internals will tell us a lot as will the ONL which was the low of a 45 degree line.  Less import than the same pattern in an RTH session but excellent signposts nonetheless.  This low should (emphasis on should) be secure.   A breach of it would be a sign of weakness and put the prominent POC into play.  
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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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