Thursday, October 30, 2014

Posted by preznicek at 9:09 AM on Thursday, October 30th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

–Market has been one-time framing since 10/16. Just knowing that is enough to possibly set up a trade for you if we move closer to yeesteray’s RTH low which is a double bottom from the previous day’s RTH low. A very visual reference that everyone sees. There is a small gap below it, so a short trade from that entry point should target the settlement of 10/27 and also the POC from that day which was prominent and is still untested.

–Overnight inventory is very balanced. Overall, the FOMC move between yesterday’s action and the overnight has been very muted and is indicative of the market having priced it in already with its recent downward swoon and quick retracement. Furthermore, yesterday’s first test of VAL upon the news coming out held it perfectly and bounced rather hard. For this reason, I don’t believe longer term traders are changing their tone at all or initiating new shorts. Pullbacks are probably buying opportunities.

–Overnight lows breached the aforementioned double RTH low (at 1961.50) but were not able to hold and prices have bounced back into yesterday’s range. As of now we would be opening below the value area but inside of yesterday’s range. Watch how the market acts on strength at VAL.

–As always, only a sharp change in value changes the tone here which is bullish. The Nasdaq 100 came within only 12 points of its multi year high a couple of days ago which was set in September. This almost 100% retracement of the late Sept, early Oct down move in this key broad market average does not bode well for bears in my opinion.

Market Profile Wisdom of the Day
In a breakout or trending move, price leads value.

Have a great day,
peter

Wednesday, October 29, 2014

Posted by preznicek at 9:14 AM on Wednesday, October 29th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

The market keeps rallying higher, one timeframing since 10/16. This is a long time for each day’s low to be higher than the previous day’s low. It’s a good thing to carry forward in your narrative, similar to knowing how many VPOC’s are stacking up above or below current prices.

A strong close yesterday far away from value and the POC may have left traders “long in the hole” this morning which would leave the market more vulnerable to a liquidation break. If so, target at least VAH and then the POC.

Overnight inventory is almost all net short this morning which is in direct conflict with what I just described about yesterday’s close. One points to a liquidation break, the other to short covering if the ONL can’t be taken out. I give more weight to the prior scenario. Whenever I look at overnight action versus RTH action, RTH action is always more important. (See MP Wisdom of the Day below)

There could be responsive action ahead of the FOMC meeting which culminates in their announcement today at 2pm EST. As I’ve been noting for some time now, I believe this is a very important meeting as it will be the official close of QE3. My gut tells me that the market has already had it’s 10% taper tantrum and the reaction could actually be bullish. Regardless, futures trade ahead of the announcement could be choppy and constrained. I tend to sit these days out.

Market Profile Wisdom of the Day
The hierarchy of information is very key.

Tuesday, October 28, 2014

Posted by preznicek at 9:15 AM on Tuesday, October 28th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

–Overnight inventory is 99% net long, so treat it like it was 100. The ONH at 1969.00 is the upside reference. Failing to cross it early could kick off a liquidation break which would have a target to the POC (TPO) at 1954.00. This Point of Control is prominent and as such has higher odds of being revisited. Read More…

Monday, October 27, 2014

Posted by preznicek at 9:09 AM on Monday, October 27th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

–Overnight inventory is pretty balanced. With the current gap down of about $9, we are opening in balance right in the middle of Friday’s value area. Opening within balance will usually produce valid counter-trend, responsive trade setups. Read More…

Friday, October 24, 2014

Posted by preznicek at 9:06 AM on Friday, October 24th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

–There is some excess on yesterday’s high. Two TPO’s wide but it has the appearance of a completed auction. That being said, the profile is rather balanced on both sides and symmetrical. Read More…

Thursday, October 23, 2014

Posted by preznicek at 8:43 AM on Thursday, October 23rd, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

Let’s start with an /ES daily chart……. Read More…

Wednesday, October 22, 2014

Posted by preznicek at 9:18 AM on Wednesday, October 22nd, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

The profiles are so stretched out that I can’t snapshot any more than yesterday’s action. Very momentum, chasing, short covering type of action recently. Read More…

Tuesday, October 21, 2014

Posted by preznicek at 9:00 AM on Tuesday, October 21st, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

Goldilocks gap of +8.25 this morning. A sweet spot for a good fade if the early trade cannot take out the ONH. Overnight inventory is very close to 100% net long which sets the whole thing up perfectly. Gap rules apply.

Yesterday’s late day advance pulled price far up to the upper end of the distribution, closing it at the tip top without value expanding all the way to that area. I think all signs point to a playable fade this morning with the usual targets. Go for yesterday’s close first, then VAH, then POC.

Valuie was overlapping to higher yesterday which I see as not bearish but not overly bullish. The prior RTH session had breakaway value as an opening gap held. I would have expected an intrinsically stronger market to establish value more clearly higher yesterday. Duly noted and carried forward.

Of course with all the talk of fading, let’s not every forget other scenarios which could just as easily be gap and hold, gap and go, or (everyone’s favorite) the slow trickle downwards about 3 handles and then rally. The important thing is to not think you “know” before the bell rings and even more importantly not trying to fit what you think you know on top of a market that has completely other ideas. As always, internals shall light the way.

Market Profile Wisdom of the Day
Impulse trading is what kills most traders. Price is simply an advertising mechanism that stimulates our impulses to do something. Just trading based on a single feeling of greed/fear/price restricts us and can completely block us from the more powerful concepts such as excess, balance, value, and timeframes which are the real drivers of the market.

Have a great day,
peter

Monday, October 20, 2014

Posted by preznicek at 9:07 AM on Monday, October 20th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

Click to Enlarge

Click to Enlarge

–Small gap down this morning with /NQ’s showing a little relative strength to the /ES. Read More…

Friday, October 17, 2014

Posted by preznicek at 9:14 AM on Friday, October 17th, 2014

Good Morning

Value areas and POC figures for /ESU4 and /NQU4 are posted free every morning HERE.

click to enlarge

click to enlarge

Of course I had no idea we would be gapping +25 at open but that’s irrelevant. What is important is to be always aware of the tone of what the market is doing. Every day has a particular color to it. Either panicky, hard and fast, slow and plodding, etc. Just being aware of this tone is often times more important than technicals or profile or anything else. Read More…