Market Profile - Daily updates

[CJS]

7/17/15 Recap and prep (for 7/20). The word of the day as far as the profile is concerned: BALANCE. Entire day until the last 45 minutes was spend in balance and inside yesterdays small range. Two factors obviously had alot to do with the nothingness; one of the lowest volume days of the year in the ES and the other majors were in complete divergence, until the futile attempt at a rally the last 45 minutes. Participation in the pit was as if it was a holiday. I listen to Futures Cast on Thinkorswims platform. Guy named Ben provides a play by play all day and is pretty helpful to get a bead on whats happening, where it happens. On a weekly level, the excess low from last week is now confirmed. Also, the volume from last week adds evidence to it. Exhaustion volume is a tell tale sign of when all the sellers (on a downside move) or all the buyers (on an upside move) have sold or bought, respectively. The weekly gap up also held. Being that we have a weekly gap, translating into two daily gaps...I wonder if these are actually break-away gaps as opposed to my observation earlier in the week of being an acceleration gap. To quote from Mind Over Markets; "a Break-away gap occurs when the market is in the early stages of a long-term trend. This sort of gap is fueled by new, initiative other timeframe participants possessing strong directional conviction. An Acceleration gap develops within a trend and reaffirms the conviction and strength of the trend's direction." Could the recent pull back in the mkt be 'correction' these analysts have been talking about? I would appreciate opinions on this observation. As stated when I started these recaps, Im relatively new in terms of years trading, being roughly a few. The volume although contradicts these daily moves. Today marks the 7th day of 1TF higher on a daily basis. Mkt is now 1TF higher on a weekly basis as well. The rest of the month should be interesting as we are near all time highs and should that be taken out, mkt would be 1TF higher on a monthly basis as well. All of these are things to keep in mind and carry forward.
***** Conflicting Info *****
Positive
> 1TF higher Daily and Weekly
> Gaps have held
> Excess low on Weekly
Negative
> Low volume
> Several very prominent POCs below
> Still Low Confidence in mkt
Im going on a family vacation next week and will be back 7/27.
I doubt I will be able to post anything. After all, play time is important.
Cheers.

 

[CJS]

Back from vacation - 7/28/15 Recap and prep (for 7/29). Today's action marked the end of 1 T.F. lower on a daily basis. Today's profile is a text book example of a short covering rally. Start with the past week being all down days (inventory getting short day after day), yesterday leaving a 'b' pattern with a poor low, and finally today's profile being extremely elongated leaving multiple anomalies and a 'p' pattern. All of this evidence supports today being not much more than the short covering rally and very emotional. Tomorrow is FOMC day; often very volatile. A couple of final observations; yesterday left the 'b' pattern which provides evidence that selling possibly was being accumulated by a longer timeframe that take home longs overnight or for longer periods of time, as well as day and short term traders getting too short. Today left a 'p' pattern which is evidence of a short covering rally that is not accompanied by new buying. This tied with FOMC day should make for an interesting afternoon session at least. I look forward to tomorrow confirming one of the two thoughts I have; one being that yesterday was in fact more accumulation by longer timeframe participants, and the mkt to continue higher and the other being that it was more of shorter term participants getting too short and today being nothing more than a day of relieving mkt pressure and the recent trend to resume to resume to the downside.
***** Conflicting Info *****
Positive
> 1TF higher Daily
> Value and TPO POC migrated w Price
> Moderately high volume
Negative
> 1 TF lower Weekly and Monthly
> Poor low from 7/27
> 24 Week balancing bracket - no directional conviction

 

[CJS]

7/29/15 Morning Update: Volume is lighter than yesterday at this time, 0540am PST. O/N Inventory is long, but barely. Each attempt to trade below the ledge left by the 'p' formation was rejected. This level is 2084.75, and is also yesterday's TPO POC. Remaining above this level is positive. If the mkt trades below this level, it could accelerate as the structure below this level is very thin and poor. If there is acceptance below this level, the anomalies could become targets for the mkt to repair. O/N high is 2093.75 and O/N low is 2084.50

 

[CJS]

7/29/15 Recap and prep (for 7/20). Attempted direction was up and with lower volume / higher value it suggests slowing. There was only 29 contracts on the low of the day. Bears could not get mkt even close to testing the ledge/ TPO POC from yesterday. Im carrying this forward. I had two observations in yesterdays recap. One of them Im going with. That is 'yesterday (7/27) left the 'b' pattern which provides evidence that selling possibly was being accumulated by a longer timeframe that take home longs overnight or for longer periods of time'. Even though yesterday's profile showed very poor structure, it held and today the market on every attempt could not find acceptance below the open; this is positive for upside continuation. What I find interesting is that the volume POC today is right at the lower distribution from the double distribution day on 7/23. There were some sellers there holding price from finding acceptance above this level. (2101.50). Along with having excess at both the high and low of the day today, I wonder if the mkt will be able to continue the 1 T.F. higher on a daily basis, OR, will balance into a rotational day tomorrow being that the TPO POC is only 1.5 handles above mid range of the day. I never put too much into money flow indicators. They are a minimal data point in my analysis, on a weighted scale they are about 1%. But when I am unsure of certain activity, as I was with the profile of 7/27; was it more accumulation from longer term players or merely short term players getting too short or a combination of both??? With todays confirming action that it is possible that longer term were more present on this day (7/27) in question, I decided to look at the Chaikin Money Flow. I have posted an image of it on the daily chart. This adds another confirming data point that institutional is more than likely in this recent market activity. CMF, shows a smooth transition from negative to positive territory and volume levels are smooth from day to day as well. View the other instances in the image where CMF moves from negative to positive; jagged. The volume and daily bars are as well. I take it all with a grain of salt. Because should the mkt be weak tomorrow, I will change my bias accordingly. Right now, Im more bullish than bearish with these data points Ive covered in todays recap. Stay alert!

 

[CJS]

7/30/15 Morning Update: 0540am PST. Moderate volume. O/N inventory has been balanced all night and within yesterdays range. It's very possible today may be balancing and rotational. It often is the closer to the center of the previous session's range that we open. Adjust expectations in these environments. Balance rules in play:
1) Remain within balance.
2) Look above or below balance and fail; on a failure the opposite extreme becomes the destination trade.
3) Look above or below and accelerate.

 

[CJS]

7/30/15 Recap and prep (for 7/31). Inside day today yet value engulfed prior days value area. Lower volume today. Technically a balancing day. However with the attempted direction up, my bias is still bullish but not as much as coming into today. Profile left a poor low today. Profile also has a weak high (weak references are those that come within a tick of a previous reference level) since today's session high is a tick below yesterdays session high. We also have a poor high. Todays profile also has a well defined 'p' pattern. This indicates short timeframe participants getting themselves too long. Again today the 2100-2103 area was met with resistance for upside continuation. The entire pm session was two sided, very slow and grinding. Volume POC is essentially in the same area as yesterday's. But the TPO POC today migrated with price (yesterday's did not), and todays settle is on the high of the session. Lot's of conflicting info to weigh on. Add in monthly option expiration and tomorrow could be pretty volatile.
***** Conflicting Info *****
Positive (reasons for mkt to trade up)
> 1TF higher Daily
> With attempted dir. up; Value, TPO POC and Vol POC migrated w Price
> 2 poor highs
> 1 Weak high
Negative (reasons for mkt to trade down)
> 1 TF lower Weekly and Monthly
> Poor low today and from 7/27
> 24 Week balancing bracket - no directional conviction

 

[CJS]

7/31 Morning Update: 0545am PST. Volume is light. O/N profile is balanced, and almost identical to the previous overnight profile. If we open within yesterday's range, we will be in balance and as yesterday, balance rules apply. One thing to note, the weak/poor high left yesterday is only considered repaired by day time trading hours.

 

[Phill Twist]

$VLTC surged 18% from the low of $7.15 on Thursday and is red hot again. VLTC is ranked high on my watch list for today. I like dips near $7 but watch resistance located up at $8.85

 

[CJS]

7/31/15 Recap and prep (for 8/3). Options expiration and the end of the month. Markets attempted direction was down today. Although there were some buyers present that created a difficult time for the bears. Sellers eventually prevailed after considerable chop in the am session. At which time G period broke. Im going into August completely unbiased in the intermediate term. Several pieces of information lends itself to my sentiment. They are:
1) Monthly: July was an outside month to June.
> More time is needed to decide whether we will begin to 1TF
higher or resume 1TF lower on a monthly level.
> Past 5 months have been in balance on a monthly level. Low
confidence.
2) Weekly:
> Still 1TF lower
> 20+ week of balancing
3) Daily/Profile
> 1TF higher.
> Higher volume today. However, up until the last hour of trade
volume was lower than yesterday. I attribute this to options
expiration. From a directional performance and value area
relationship point of view, today's assessment of the mkt is
Moderately Strong.
> There are now 3 poor lows the mkt may contend with, all
created this week; this is negative for upside continuation.
Is the market attempting to shake out weak longs? Are longer term players slowly accumulating long positions?
I would say that if the mkt shows strength coming into Monday, the destination could be the YTD high of 2134.
If weakness is evident, there are several destinations to the downside, listed above (poor lows).
On a final note, if I have missed anything please pipe in. My learning is and will always be never ending.
Thanks.

 

[CJS]

8/3/15 Morning Update 0600am PST. Volume is light; 148K. O/N inventory is net short but not 100%. O/N High is 2102.5 and O/N Low is 2092.75. Most of the activity has been inside Friday's range. I'm applying balance rules for my trade today. If the mkt breaks out of balance to the downside and finds acceptance, my targets will the poor lows discussed in Friday's recap. If the trades to upside out of balance and accelerates, the mkt could attempt to take the highs from 7/31 (2108.5), 7/23 (Poor at 2110.5), 7/22 (2112).