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| 3843.50 | ONHOvernight High. A term mostly used in describing the futures market which has an overnight session and trades almost around the clock. To be precise, in the /ES this is the high made between 4:30pm EST and 9:30am EST the next day. |
|---|---|
| 3819.00 | VALValue Area Low / ONLOvernight Low. A term mostly used for the futures market as it trades almost around the clock. To be precise, in the /ES this would be the lowest price between 4:30pm EST and 9:30am EST the next day. |
| 3811.75 | Top of Single PrintsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no value there. The endpoints of single print sections are considered to be potential support or resistance points. |
| 3799.00 | RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. Low / Top of Gap |
| 3777.00 | Bottom of Gap |
Yesterday’s overnight gap held with no fill as an opening drive took prices higher and never looked back except for a minor late day liquidation breakA sudden selloff in the market that has the following characteristics:
-Often happens very early or late in the day
-Comes out of a pattern that doesn’t suggest such a break should occur
-Has no definitive catalyst or news that drives it
-Has much faster tempo than the one that has already been established
-Is often short-lived and will retrace 100% soon after or the next day
A liquidation break happens when short term traders get overly long and all panic out at once. It is different from a stronger, more lasting correction in that there are usually only very short timeframe players involved, usually those who got most recently long at poor location.. Overnight inventoryA way of measuring overnight activity in the futures market by just noting how much of the overnight activity happens to fall above the prior day's settlement value (4:15pm EST close) and how much falls below. If more activity is above the settlement, then overnight inventory is said to be net long. If more is below, then it is said to be net short. If all of the overnight activity is above the settlement, then it is said to be 100% net long. If all of the activity is below the settlement then it is said to be 100% net short. The overnight inventory situation matters most and has the most impact on early trade when it is skewed 100% in either direction because when the imbalance is very large like that then the odds of an early correction increase greatly. This is due to the fact that most... is net long again this morning to the tune of about 90%. As of now we are slated to open within range and are currently trading very close to overnight halfbackA term for the halfway point between the high and low of any session, could be a day session or an overnight session. On Peter's market profile charts it is always a dark yellow horizontal line at that level..
The large gap from yesterday is a carry forward as are the single printsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no value there. The endpoints of single print sections are considered to be potential support or resistance points. in the RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. distribution. TopsTops refers to the highest or lowest possible price that will be accepted to enter a trade when bidding or offering using limit orders. Therefore if the moderator says “Shorting IBM at 84.60, 84.50 tops”, it means that limit orders between 84.60 and 84.50 are being used to enter the position. of single printsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no value there. The endpoints of single print sections are considered to be potential support or resistance points. are often supportive. I am noting that the ONLOvernight Low. A term mostly used for the futures market as it trades almost around the clock. To be precise, in the /ES this would be the lowest price between 4:30pm EST and 9:30am EST the next day. supported just above VALValue Area Low. Short term buyers are firmly in control here.
Yesterday’s distribution was “p” shaped which tells us that old businessAny transactions in the market that are closing or adjusting positions that were already entered in a previous session. This is in contrast to "new business" which is the term for trades by market participants who are entering a new position in a security for the first time. It is a general rule that the market transacts old business before it transacts new business. We see this most clearly on large gaps in the futures market. When those gaps fill, that is old business being transacted as the overnight traders are taking profits on positions that they already entered prior to the RTH session starting. (short covering) was being transacted early in the session. Value was established higher.
Scenarios
- While bias is clearly upwards currently, don’t discount the potential for a liquidation breakA sudden selloff in the market that has the following characteristics:
-Often happens very early or late in the day
-Comes out of a pattern that doesn’t suggest such a break should occur
-Has no definitive catalyst or news that drives it
-Has much faster tempo than the one that has already been established
-Is often short-lived and will retrace 100% soon after or the next day
A liquidation break happens when short term traders get overly long and all panic out at once. It is different from a stronger, more lasting correction in that there are usually only very short timeframe players involved, usually those who got most recently long at poor location. in today’s session. There is a bit of a piling on effectA market dynamic where very current action is adding on to preceding action that was firmly in one direction. An example would be back to back trending days. Another example could be a strong trending day down which closes near the low and then gaps down the next morning. Think of it as the most current action piling on to the preceding action. The outcome to this is often a very sharp reversal in the opposite direction due to this effect. with very little long liquidation in this run so far. - Overnight trade is quite balanced with a small distribution that is very wide right at the volume POCPoint of Control, also known as the "fairest price to do business". It is the price level in the /ES where the greatest amount of volume in the prior RTH session traded. ShadowTrader measures the POC using volume but the traditional way is to mark off the widest point of the day's distribution where the most TPO's printed going across from left to right, indicating that that was the price where the most time was spent. It's important to pay attention to both the volume POC and the TPO POC. from yesterday. That denotes value at that area. As traders are comfortable with these higher prices currently we could easily see more backing and filling in the RTHRegular Trading Hours. In the /ES this means the price action from 9:30am EST to 4:15pm EST only. session around this area. If so, cut targets and stops smaller and look to responsive tradeA responsive trade is a counter-trend trade taken against a specific level. The theory is that when two sided trade is taking place, there will not be enough momentum to push past key levels and buyers or sellers will respond to those areas, essentially pushing prices away from them. This is the opposite of breakout or initiative trade which is more directional in nature and is generally taken in the direction of the prevailing trend. for your daily bread.
- There is no potential for change in tone unless the single printsAny section of the market profile distribution that is only one TPO wide. Single prints are a sign of emotional buying or selling as very little time was spent at those levels and thus there is no value there. The endpoints of single print sections are considered to be potential support or resistance points. come into play and then potentially the unfilled gap.
Outside of that scenario, continue to bias yourself long.
- While bias is clearly upwards currently, don’t discount the potential for a liquidation breakA sudden selloff in the market that has the following characteristics:
James Dalton Field of Vision
James Dalton's flagship market profileA way of reading the market that recognizes either time spent or volume traded at a particular price level. A market profile can be either made up of “TPO’s” (time price opportunities), or volume. TPO’s measure how much time was spent at a particular price, while volume-based market profiles measure how much volume traded at a particular price. Generally, market profile is used in the trading of futures, especially the /ES. ShadowTrader utilizes volume based profiles. instruction
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