Peter’s Premarket Perspective | Friday, August 5, 2022

Peter Reznicek

The Market Profile value areas and ShadowTrader Pivots for /ESU22 and /NQU22 Futures are posted free every morning in the ShadowTrader Swing Trader newsletter.

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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 Balance in balance
Overnight Inventory balanced
Current Price/Overnight Range lower third
Shock and Awe yes
Potential for Early Trade yes
Short Term Bias market in rally mode
  Key Levels for Today
4173.25 Swing High (Overnight)
4153.50 Volume POC (Prominent)
4136.00 RTH Low
4094.25 VPOC 8.2
4080.50 Bottom of Balance Area

Ongoing Narrative / Commentary

Balancing day yesterday with very prominent POC which was very bullish until NFP’s were released earlier this morning that have sent futures careening lower and well out of range, creating a true gap in the process.  Gap rules are in play.

The morning weakness on that report has also put the /ES right back into the middle of the recent balance area.  This puts the lower end of balance back into play.

As shown below in the 24 hour daily chart of the /ES, this morning reaction to the economic data is putting the uptrend into question.  Current prices are sitting right on the line.

VPOC’s 

  • 08.02  4094.25
  • 07.28  4073.50
  • 07.27  3975.00
  • 07.26  3924.25
  • 07.13  3808.00
  • 07.14  3794.25
  • 06.17  3675.50

Scenarios

  • Large true gap lower puts potential for fade into play early.  Any lack thereof is bearish.  Keep gap rules firmly in mind, especially #2 and #4.  
  • Any downward follow through should be targeting the Bottom of the Balance Area first and then the nuances sequentially that you can see in the graphic above and which have all been Key Levels in the past and should still be in your narrative.  Monitor for continuation.  
  • Establishing value anywhere other than unchanged puts the recent rally into question.  The news this morning bolsters the case for more rate hikes and that is what the market is attempting to price in right now which is a more bearish view.
  • Pay close attention to where prices move in relation to the trendline shown in the graphic above, it’s important!

Market Mind Games – Denise Schull

What if the mystery of market crashes stems from a simple but total misunderstanding of our own minds? Could everything we think we know about ourselves—intelligence and rationality versus emotion and irrationality—be wildly off the mark? Simply put: yes.

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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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