Market Profile Blog – Friday, May 22, 2015

Posted by preznicek at 8:26 AM on Friday, May 22nd, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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Balance continues into last nights overnight session, with overnight inventory dead even on both sides of a prominent POC. The second such prominent POC in a row.

I believe the futures all time high at 2134.00 is still the upside reference. Play should remain responsive until then. There is also an overnight low at 2112.25 which would be our downside reference. Lack of acceptance above or below these two levels keeps things status quo which is sideways.

Remember that balance leads to excess. We’ve already had a few false starts in either direction. The longer it plays out, the larger the move will be. Internals will tell the tale if the breakout is going to go. During this whole consolidation, internals have been divergent continually which is what causes the breakouts to fail. A breakout that goes will be accompanied by stronger internal readings across the board, all in sync.

Have a great day,
peter

Market Profile Blog – Thursday, May 21, 2015

Posted by preznicek at 8:28 AM on Thursday, May 21st, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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In yesterday’s blog I discussed balance rules. Interestingly enough we found some acceptance yesterday on the upper side of balance, however there was absolutely no migration of value or POC higher. In fact, value was overlapping to lower yesterday. Much of the late day advance and subsequent failure can be attributed to the release of the FOMC minutes, of course.

Now coming into today’s session, futures are trading right around the low end of the balance area. Overnight action took it quite lower but we’ve recovered. The overnight inventory is 100% net short. That being the case and with futures well off of overnight lows, I am coming into this session thinking that the market was unable to find stronger sellers below balance and may be overly short coming into the bell. Early trade will tell the tale and context will be king.

The TPO POC at 2123.50 is prominent and as such would be the target on an early fade if such a trade should set up.

Overall, signals are very mixed coming into this open with price exploration on both sides of the balance area. Use some caution here.

Have a nice day,
peter

Market Profile Blog – Wednesday, May 20, 2015

Posted by preznicek at 8:49 AM on Wednesday, May 20th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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Balancing day yesterday with value unchanged. A new all time high in the RTH session but the overnight was higher between 5/18 and 5/19.

Yesterday’s TPO POC is very prominent at 2126.00 and price is trading basically flat right at that level currently. Overnight inventory is very balanced and price is slated to open right in the middle of the VA. Thus we are very in balance.

Balance rules apply…..A larger move should develop if the market finds acceptance outside of balance. Remember the possible scenarios. Look above and go, look above and fail, remain in balance, look below and go, or look below and fail. On any failures, expect re-entries back into balance to carry all the way to the opposite extreme of the balance area. For today’s trade I would see the balance area as 2122.50 to 2127.50.

Have a great day,
peter

Market Profile Blog – Tuesday, May 19, 2015

Posted by preznicek at 9:02 AM on Tuesday, May 19th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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New all time highs yesterday on continued poor structure and low volume. Yesterday’s distribution was a double one which does not imply a lot of new money committing fully to the market at these levels. Still it is what it is, and the tone is bullish and should not be ignored. As always, treat each distribution as if it was a separate day. Acceptance in the upper one is more bullish, acceptance in the lower one less so. Read More…

Market Profile Blog – May 18, 2015

Posted by preznicek at 8:24 AM on Monday, May 18th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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I made some detailed comments on the distributions in yesterday’s video. I’ve posted the video below at the end of this post. You’ll note the title of the video is “Long Risk Continues to Build” You can draw your own conclusions from that. Here are some of the highlights…..

-Recent sessions made a new all time high in an overnight session. This will probably not be the high of this move. Those highs are usually made in an RTH session.

-The horizontal line area where there was a recent double top is very important. The market tried to find acceptance below it on Friday bu Read More…

Market Profile Blog – May 15, 2015

Posted by preznicek at 9:16 AM on Friday, May 15th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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Large gap up yesterday which followed through to the upside albeit on what I see as low volume and a double distribution. Read More…

Market Profile Blog – Thursday, May 14, 2015

Posted by preznicek at 9:00 AM on Thursday, May 14th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

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Although there were three ticks of excess on the low yesterday, anyone who was watching closely yesterday afternoon would have noted that it was quite poor with sellers continually banging on the same level at 2093.25 and getting more and more short in the process. While there was a later day break below that level, it was quite a lackluster follow through which didn’t even come close to getting to the 5/12 VAL which is what it “should have done”. Anytime a market doesn’t do what it “should have done” it tends to go ham in the other direction. Hence the double digit gap to the upside that you are seeing right now. Read More…

Market Profile Blog – Wednesday, May 13, 2015

Posted by preznicek at 9:34 AM on Wednesday, May 13th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

If you were watching the tastytrade show yesterday, in the first segment I had an epiphany of sorts that I believe took my grasp of the profile much further. I was not surprised at all by the short squeeze that seemingly came out of nowhere in midmorning but didn’t realize until I had capitalized on part of it why it seemed so obvious. I had to think it through a bit and then realized that repair of poor structure sometimes is on a delayed effect. Sometimes a market will clearly get itself overly short but instead of gapping up the next morning, it gets itself even more short. Then at some point there is some failure to go lower below a key point, coupled with a positive divergence in the internals and voila! you get a face ripping rally to the upside when least expected. Exactly this scenario played out at the higher low that was made between 10:15 and 10:30am EST.

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The graphic above is a pic of what the profile looked like on Monday. I felt that the action was forced to the downside all day then and by the bell the distribution had formed what is known as the 45 degree line. This is when you can draw an (approximate) 45 degree line from the low to the rightmost edge or TPO POC. I didn’t mention this in my Tuesday morning commentary because of the large double digit gap down that was happening at the time. The 45 degree line is a sign that traders have gotten themselves dangerously short as they have pressed and forced prices lower in a back and forth manner while the POC has failed to migrate lower at all. When we were down 15 points on Tuesday morning, I wrongly thought that the gap negated the poor structure that I was seeing. I realize now that this structure was still there and needed to be carried forward and that the gap was just even more shorts piling on at inopportune time. While the market went lower in the first 15 minutes of trade, it never took out the overnight low. That was the signal that some short covering was going to ensue very rapidly and soon. Let’s look closer with a magnifying glass at what the distributions looked like at yesterday’s low……

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The picture speaks for itself……I should have carried forward that the market was still overly short and got itself much shorter in early trade. If there were real, longer term sellers, the market would have broken the overnight low and probably followed through lower. When it didn’t that should have been the time to be on high alert. If the above wasn’t enough to scream that it was coming, look at the NYSE tick at the exact time the higher low was forming just before the rip higher.

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And the rest is history. I made solid money yesterday buying the break back through the open which began the entrance back into the gap. But I could have made a lot more had I bought earlier on the higher low had I realized that what the market was about to do was repair the structure of what had happened on Monday.

Ok on to today……..

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The POC is very prominent and as such has higher odds of being revisited today. Note how the ONL is right down to it to the tick. (The day timeframe is still so firmly in control here and confidence remains low). This level is also yesterday’s settlement. This the key downside reference coming into today’s session. Any larger move should develop in relation to this level. A failure to test this area from following through higher off of the small gap we are opening on is bullish. An immediate test and failure through it is more bearish.

The overnight high is quite a bit higher than where we will open. Watch closely to see how the market reacts early and if this level can be taken.

have a great day,
peter

Market Profile Blog – Tuesday, May 12, 2015

Posted by preznicek at 8:13 AM on Tuesday, May 12th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

cllick to enlarge

cllick to enlarge

The gap as shown in the graphic above started to fill in yesterday’s RTH session and has continued to do so in the overnight session, even moving into the range of 5/7.

Gap rules apply, we are currently trading off about 14 handles as of 8:05am EST. For a refresher on these rules, please see Friday, May 8th blog. Read More…

Market Profile Blog – Monday, May 11, 2015

Posted by preznicek at 9:10 AM on Monday, May 11th, 2015

Good Morning

Value areas and POC figures for /ESM5 and /NQM5 are posted free every morning HERE.

In my video of yesterday, I pointed out an important area which should be paid attention to today. The top of the spike from Friday morning’s trade which corresponds with Friday’s RTH session early pullback low (C period). Overnight trade has breached this area, but not found any new sellers below and price is currently trading well above and inside Friday’s value area (opening in balance). Read More…