Wednesday, November 26, 2014

Posted by preznicek at 5:48 PM on Tuesday, November 25th, 2014

Good Morning

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

**I am writing this up early for my readers as I will be traveling tomorrow morning in advance of the holiday and will not be able to post the blog in the morning. Also note, there will be no Premarket Perspective entry on Friday the 28th.**

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I believe the annotated graphic above says it all but let’s recap. All the stuff there is important.

In yesterday’s entry, I wrote that traders should do what works until it doesn’t. That hasn’t changed at all. The market remains extremely overbought but value continues to develop higher. That being said, the last two sessions were overlapping as opposed to “break-away” which may indicate the trend is tired.

Yesterday’s high did have excess. Is it the end of the move? With this high being tested for the 3rd time now, I think probably not. That boxed area is the upside reference. I believe a push through there takes the market higher.

Yesterday we had a prominent POC which was revisited and today we have the same situation. Remember that this is the TPO POC (the widest point with the most letters) as opposed to the volume POC which is the colored letters. Both are important. They are usually the same but not always.

As always, a more meaningful break to the downside would need to establish some acceptance lower. That has not been the case at all recently.

Obviously if you are reading this on the morning of the 26th, the overnight action may have changed the tone.

Market Profile Wisdom of the Day
You have to lean into the wind a little bit to be an innovator.

Have a great day and Thanksgiving holiday. I’ll see you all here on Monday morning on the first trading day of December.
-peter

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Tuesday, November 25, 2014

Posted by preznicek at 9:07 AM on Tuesday, November 25th, 2014

Good Morning

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

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–Overnight inventory very balanced. Read More…

Monday, November 24, 2014

Posted by preznicek at 9:05 AM on Monday, November 24th, 2014

Good Morning

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

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Opening within Friday’s range but above value area high. Overnight inventory is almost 100% net long. Although the overnight high may be taken out, it’s the Friday high that is the reference so a liquidation break could occur if futures cannot get to that level early enough. I believe there are probably still some longs trapped from Thursday night. The market will go higher when that timeframe resolves it’s inventory issues. Read More…

Friday, November 21, 2014

Posted by preznicek at 9:18 AM on Friday, November 21st, 2014

Good Morning

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

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Well…..we’ve been saying for awhile that it probably resolves higher but this is unprecedented. China cut rates and hence the party is on globally apparently.

Double digit gap which is trickier to trade than a smaller one. Remember that the ones larger than 10 rarely fill all the way (sometimes not at all) on the first day. I would expect a sideways day in the futures, which means shift your focus onto daytrading equities long. That’s usually how these extra large gaps play out; the /ES goes nowhere but bullish patterns in stocks intraday work really well.

As we are so far above yesterday’s range there is little to say regarding the distributions.

Have a great day, we’ll discuss more of the nuances in the video on Sunday.

-peter

Thursday, November 20, 2014

Posted by preznicek at 8:24 AM on Thursday, November 20th, 2014

Good Morning

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

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–Value overlapping to down indicating to me that market is tired but so far no stronger sellers emerging as of yesterday.

–Overnight inventory is almost 100% net short. Assume that if the ONL is not taken, then we get a snapback rally to balance that out a bit. With futures down about 8 currently it would be a “goldilocks gap” if we opened right here.

–I’ve purposely left the gray line from yesterday’s photo on the chart which is the high of the six day balance consolidation range. Thus far we have not established value back within the range so long responsive trade may still be the order of the day. Note that to make it even more vague, value yesterday straddled the gray line perfectly.

–As Brad and I were discussing on our tastytrade show yesterday, the market traded into a very neutral area yesterday as there was acceptance between the value of the balance area and the breakout day of Tuesday. In the bigger picture the prognosis is not very clear to me right now. Remember that selling that is weak at its start can develop into stronger selling as different timeframes begin to throw in the towel.

Have a great day,
peter

Wednesday, November 19, 2014

Posted by preznicek at 8:52 AM on Wednesday, November 19th, 2014

Good Morning

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

Yesterday was day one of the breakout, usually a day that should close on the highs as everyone tends to realize too late that the consolidation has broken upwards. Yet, yesterday did not close this way and is now trading below halfback (always the dark yellow horizontal line on the charts). All of this could be noise or it could really matter. After such a long balance area, I believe that if the market is going to stay bullish without a short term correction then the range should not be reentered at all. As such, the gray line on the profile pic below is where bulls need to hold it. That is the high of the range. Expect that area to be of interest today as the ONL stopped one tick above VAL and those prices are just a small bit away from that range high. Read More…

Tuesday, November 18, 2014

Posted by preznicek at 9:02 AM on Tuesday, November 18th, 2014

Good Morning

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

Not much new to report as the market stays in balance for a sixth session yesterday.

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Yesterday’s high was quite poor. Overnight action has taken it out, however, only RTH action counts as repair.

Overnight inventory is very balanced this morning and we are opening up in balance so the trade may be later rather than earlier once things shake out a bit.

2043.75 is still the upside reference which is the all time high made in an overnight session on 11/12.

Value unchanged keeps things status quo with buyers in control. Short term traders are dominating trade right now. I don’t think we will see longer timeframes unless we move out of balance on an increase in volume.

Market Profile Wisdom of the Day
Initiating sellers don’t wait for a market to rise to a price. Responsive sellers do as they need the market to go up first before they’ll sell it. They tend to sell above value assuming that there will be a reversion trade.

Have a great day
peter

Monday, November 17, 2014

Posted by preznicek at 8:43 AM on Monday, November 17th, 2014

Good Morning

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

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–Overnight inventory is 100% net short coming into today’s session. As such we’ve already rallied a good piece off of overnight lows. Further failure to get lower early in the session could lead to more short covering. If so, target VAL, POC, VAH and then unchanged in that order. Read More…

Friday, November 14, 2014

Posted by preznicek at 9:01 AM on Friday, November 14th, 2014

Good Morning

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

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Continued little to report as market stays in balance near all time highs. Read More…

Thursday, November 13, 2014

Posted by preznicek at 8:28 AM on Thursday, November 13th, 2014

Good Morning

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

click to enlarge

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Three days of balance at the highs. As always we can either look above and go, look above and fail, remain in balance, look below and go, or look below and fail. These are the only possible outcomes. Think in those terms. It opens your mind up to possibilities and allows us the flexibility to act upon any scenario, not just the one that we expected before the bell. How many times have you thought it would be up, but it ends up being down. You either pass on the longs or get stopped out of them but then you miss a large down move where you do nothing? Has this ever happened to you? We’ve all been there and it is a product of rigid thinking and lack of imagination.

–Overnight inventory is net long but not overly so, with a new all time high at 2043.75. As of now we would be opening just slightly out of balance to the upside.

–As it was yesterday, the value area is rather squat so use caution on fading its extremes.

–The last two sessions are back to back poor highs which are exponentially important. Remember that this not only means the break upwards could be larger than expected but also the break downwards. The poor high is formed by short term traders getting overly long. For now there has been repair in the overnight session but this does not count towards actually repairing the pattern. If anything it has served to get players even more long. I am coming into the early part of the session with this information squarely in mind.

Have a wonderful day,
peter