Market Profile - Daily updates

[CJS]

8/10/15 Recap and prep (for 8/11). Lower volume with a substantial gap that held, and higher value - translates to a confident day. The mkt didnt look back all day except in the pm session in 'M' period. This I thought was going to be a nice liquidation. Because, most of the day was grinding and slow; add in the gap, and I formed the opinion that there were many longs accumulated. Wrong opinion. Thankfully I didnt risk much on this short trade I took.

In preparing this recap I have noticed something that would've been nice to be aware of during the day. From an article written by Jim Dalton: 'The most potent combination is excess followed by a gap.' Friday had excess (low) that is very visible on the daily chart. Price action today accelerated off of the 200 day MA as well, another data point to carry fwd.

If there's more upside tomorrow, the destination will be the top of the weekly balance bracket (2126.25)

If we trade to the downside, the first dest would be the pit low today (2086), if there is no rejection at this level, the mkt could accelerate filling the gap. Gaps are considered single prints, and are a form of excess too. When price retraces single prints, it has a tendency to accelerate due to poor structure.
***** Conflicting Info *****
Positive********************
1) Gap held
2) Open-Drive today. The definition is way too long to post here. But here's a small def.: "Strongest. Generally caused by other timeframe participants who have made their market decisions before the opening bell"
3) 1 T.F. higher on Daily level
Negative:*******************
1) The profile today is classic short covering shape (poor high with a 'p' pattern and the open was basically the low of the day)
2) Mkt intermediate term has very low confidence.
3) 25 week balance bracket
4) The week ending 8/1 left a weekly poor low (on 7/27@2056.5)

 

[CJS]

8/11/15 Morning Update
High volume over night, 257K at 0545am PST. Double distribution and as of now we have a small gap down of about a handle. China has devalued their currency, this has contributed to the O/N volatility. Also, O/N activity confirms yesterday as being dominated by short covering. On the daily chart, there is a definite wedge forming for some days now. The mkt is getting wound tighter and tighter.
O/N inventory is almost 100% short.
O/N High is 2101.75
O/N Low is 2083.25

 

[CJS]

8/11/15 Recap and prep (for 8/12). Higher volume and lower value imply a very weak market. However there are some data points that are contrary (at least in the short term). They are:
> The ES is holding above its 200 day MA. In fact bounced off of it today.
> Circled on the daily chart are three daily bars that show excess on the lows. Each of these auctions have completion (to the downside)
> The ES is remaining above the daily trendline. It's looked below on two occasions and did not find acceptance.

Sellers were present at every rally today. However, once they couldn't press the mkt any lower, in 'J' period the short covering rally took control into the close to settle exactly at halfback.

Once the gap from overnight was filled the market did accelerate to the downside closing the gap from yesterday. We are just above the center of the 25 week balance bracket. I really have no bias to hold going into tomorrow. With the way mkt has been trading recently, there would be no surprise in either direction. That's how Im preparing my mindset.

 

[CJS]

8/12/15 Morning Update. High volume overnight, 392K as of 0540am PST. China's nonsense has railed our mkt's overnight. Range is 31.5 handles, the high is 2085.25 and the low is 2053.75
Currently, a gap of 6 handles to the downside. So, gap rules apply once again. They are listed in 8/10's Morning Update for reference.
O/N Inventory is very short. Since yesterdays pit low is 2070.75 and is about 3 handles (2073.5) away from the center of the 25 week balance bracket, I'm using the pit low as a go no/go level. If the gap doesnt fill, the bottom of the bracket could be a destination trade at 2023. If we can find acceptance back in yesterdays range, all auctions remain to the upside.

 

[CJS]

8/12/15 Recap and prep (for 8/13). Substantial volume and range today. Beautiful buying tail in 'B' period with only 18 contracts on the low. Today's auction to the downside off the open repaired the poor low from 7/28 (also a weekly low). There are no more anomalies to the downside as far as the profile is concerned. This is positive for upside continuation.
Put another way, the short term auction to the downside is complete. This in no way doesnt mean there couldnt be a new auction to the downside.
The exception is today's profile, stretched out like it is, there are a few anomalies left behind (flat spots on the profile). Unless the mkt trades to the downside in the near future, these are not important.
We are still 1 T.F. lower on a daily and weekly basis. Today's action settled right on the highs. Another positive data point to carry forward.
*********** Conflicting Info **************
Positive:
> All auctions to the downside are complete (short term)
> Excess low on todays profile.
> It was obvious today there was new money buying as opposed to the rally we saw just consisting of short covering.
> 2 poor highs above (attracts mkt to repair)
Negative:
> Intermediate time frame - very low confidence
> 25 week balance bracket
> World events; e.g., China
> 1 T.F. lower on Daily and Weekly timeframes

 

[CJS]

8/13/15 Morning update. O/N inventory is long but not quite 100%. As of 0540am PST, we have a gap up of 3 handles. The mkt is out of balance to the upside. Gap rules apply. They are posted in 8/10's morning update for reference.
Volume moderate: 185K
O/N high 2093
O/N low 2076
Prior pit session high 2084.75
Prior pit session low 2046.5

 

[CJS]

8/13/15 Recap and prep (for 8/14). Lower volume and higher value today. Yet, the attempted direction was: no direction. The mkt sold off shortly after the open and found balance around the O/N low and when sellers could not press it beyond that area, buyers prevailed. Similar reaction when buyers dried up around the pit session high of 2088.25 from 8/11, classic late day long liquidation. Technically, 1 T.F. lower has ceased on a daily level. The settle is 2 ticks below halfback (2080.5). So, no winners today. This is real obvious on the daily chart.
We do have a poor high left today. Something Ive noticed in this week's of profiles;
Every low has had excess, and 3 days of the 4 have had poor highs. Im still a student, but to me, this feels like buyers really want to push the market higher. Poor highs are an indication of traders getting the market too long for the probe to continue higher. Does this translate to anything meaningful? I dont know, but if the mkt makes a move higher tomorrow, Im going to be ready for it. I'll change my bias on a dime if it goes lower simply because of the low confidence we've been in for 25 weeks now.

 

[CJS]

8/14/15 Morning Update. Volume if moderate, 155K at 0545am PST. O/N inventory is balanced and the mkt is in balance (inside yesterday's range). Balance rules apply.
1) Remain within balance. Rotational and limited opportunities, so adjust expectations.)
2) Look below or above balance and fail. A failure targets the opposite extreme.
3) Look below or above and accelerate.
Yesterday's pit session low (2073.25) is my go no/go level as this is a tick away from what has been the center of the 25week balance. It is also very close to the 200 day MA. So should the mkt find acceptance below this level, the target becomes the lower extreme of the balance (2023).
O/N high 2085.25
O/N low 2073.75
Prior pit session high 2089
Prior [it session low 2073.25

 

[CJS]

8/14/15 Recap and prep (for 8/17). For most of Friday's session the mkt was in balance spending a lot of time around the TPO POC at 2083. This POC is a very prominent one. We had a late spike, a small one but still technically a spike with only 2 ticks of excess separating the two distributions. For Monday finding acceptance in the upper portion of the spike is positive. A target would be the poor high from 8/10 (2100.75). Finding acceptance below the spike will target the very prominent TPO POC, and possibly Friday's pit session low (2076).
1 T.F. higher on a daily basis.
1 T.F. lower on a weekly basis.
There's an obvious wedge forming on the daily chart.
Still holding above the 200 day MA, positive.

 

[CJS]

08/17/15 Morning Update. O/N Volume is moderate; 186K as of 0555am PST. Most of the activity O/N has been on the edge of being out of balance to the upside. But, is now making new lows. The expanded profile shows 3 attempts overnight testing the single prints from Friday's profile, driving lower on the 3rd. Looks like now we may be opening within Friday's range, around the TPO POC area.
O/N Inventory appears balanced.
O/N high 2094.5
O/N low 2079.5
Prior Pit high 2089.75
Prior Pit low 2076