The Market Profile value areas and ShadowTrader Pivots for /ESM22 and /NQM22 Futures are posted free every morning in the ShadowTrader Swing Trader newsletter.

premarket

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Click HERE for a market profile key that will help you interpret the chart above.

  Pre market indications
Opening In/Out Balancein balance
Overnight Inventorybalanced
Current Price/Overnight Rangelower third
Shock and Aweno
Potential for Early Tradeno
Short Term Biasbearish / market on track to retest Feb lows
  Key Levels for Today
4158.50ONH
4119.00RTH Low / VAL
4111.50ONL
4094.25Feb 24 Swing Low

Ongoing Narrative / Commentary

Strong selling to cap off a very bearish month in the /ES with a close near the lows to boot.  Not much follow through on the first trading day of a new month and a week that will bring us our first substantial rate hike from the FOMC.

While the /NQ is well below the Feb lows, the /ES is still holding slightly above.  This dynamic should continue to be a part of your narrative.  I have seen this many times before where new shorts will short the swing low only to find that the /NQ is so oversold at that point that it catches a bit, resulting in a false break through the low in the /ES.  This is just one scenario, but keep it in mind.  Location for new shorts is not the greatest right here.  That doesn’t mean that the market cannot move lower, it is just a fact.

Overnight inventory is very balanced coming into today’s session coupled with the distinct lack of follow through to Friday’s RTH activity.  The ONL is only a couple points below the RTH Low.  While the RTH session can often be a different animal from the overnight one, for now it seems that sellers may be painting themselves into a corner.  Either that, or we should consider the overnight session as needed balance to the trend (read: excess) that occurred on Friday.

VPOC’s
  • 04.21  4390.00

Scenarios

  • With the futures trading just outside of range, the RTH Low / VAL is the main key level to deal with in early trade.  Assume  potential for short covering above that level and keeping the status quo of sellers in control below it.  Target the February swing low and monitor for continuation.  
  • Should the market find acceptance above the RTH Low/VAL area, note that there is no potential for real change unless the ONH is breached.  Consider any such action to be balancing.    
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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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