Peter’s Premarket Perspective | Monday, August 9, 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 100% net short
Current Price/Overnight Range middle third
Shock and Awe yes
Potential for Early Trade yes
Short Term Bias bullish
  Key Levels for Today
4433.25 RTH High / ATH
4429.00 TPO POC (Prominent)
4421.75 RTH Low (Poor)
4411.75 VPOC 8.5 (Prominent TPO)
4391.25 Weak Low (8.4)

Ongoing Narrative / Commentary

Friday represented a breakout from balance, however, as discussed in the weekend video, the structure and underpinnings were not very impressive.  Price closed out of range on very middling internals and a lack of range expansion.  The value area was very small and the TPO POC prominent.  Not what we would like to see on day one of a breakout from 10 day balance.

Overnight prices traded plenty of time below Friday’s RTH distribution which is bearish, however prices have since recovered to just inside the range.  While we may open within Friday’s range, I’ve listed potential for early trade as a yes should prices move back out of range.  When considering early trade, note the mixed signals of 100% net short overnight inventory but current prices being above overnight halfback and trading just inside of Friday’s range.  In a nutshell, the move back into the larger balance area brought in some sellers but obviously not that many since the lower prices didn’t hold.  The RTH session can be a completely different animal from the overnight one so we will have to see how traders react to this.

Above and below current prices we have prominent TPO POC’s that have not been tested.  This session will be about which one the market goes to.  Once you have established direction, use these as potential targets.  Bring into your narrative how the ONL came right down to the lower one and turned almost perfectly.  This makes that low weak but also confirms that buyers were in control, at least as far as that overnight session is concerned.

Scenarios

  • As discussed above, the market is  going to move to either of the prominent TPO POC’s either above or below.  The signals are pretty mixed here as one would expect that the move back into balance overnight would be very bearish, however prices have recovered quite a bit from that ONL.  
  • Should the upper POC  be in play, target it and assume that status quo (buyers in control) continues.  Should the lower one be in play, that would  potentially make all of Friday’s RTH range excess and open us up to potential for rotation all the way to the lower end of balance as per the balance rules.  
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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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