Market Profile - Daily updates

[CJS]

09/02/15 Recap and prep (for 9/3). Patience paid off today. From the open the mkt repaired the anomalies from yesterday, and adjusted the O/N inventory. I didnt trade this move, I never trade the first two sessions. Personal preference to save the monetary and emotional capital. But I was waiting to see what would happen after the 1st two periods; and after the following 1.5 hours of wide range balancing, we got the move up.

We also got a late day spike, which closed the gap from 8/27. We must wait until tomorrow's session to judge the movement for follow-through and conviction. I'm considering the base of the spike today's open.
Spike Trading Rules:
> Opening and remaining above spike. Very positive and suggests that the latest auction had not gone high enough to cut off the buying.
> Opening and remaining within the spike tells us that the spike was accepted; this would also be seen as positive as value would be developing higher.
> Opening below the spike or opening within the spike and quickly trading down below the base of the spike is negative telling us that the auction had gone high enough to attract sellers.

Today left a very prominent TPO POC. (Prominent = much more pronounced when reading from left to right. Very Prominent = 75% or more of the 30min periods). Carry this info fwd as a target should the mkt reject the spike come the open. Should the spike be accepted, then the destination becomes the gap close at 1962.25 from 8/31/15.
Most of the day was spent in balance, if the spike is accepted, I would see this as very positive as a breakout from balance and acceleration.

 

[CJS]

09/03/15 Morning Update. Currently trading a 10 handle gap up. Recall the spike rule "Opening and remaining above spike. Very positive and suggests that the latest auction had not gone high enough to cut off the buying."
Gap rules in play today,
1) Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2) . Large gaps (10+) may not fill or may fill only partially on the first day. Pay attention to “halfback” of the gap distance.
3) If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.

O/N high 1968.75
O/N low 1944.25
Prior pit high 1948.25
Prior pit low 1916.25
Volume: 276K as of 0550am PST

 

[CJS]

09/03/15 Recap and prep (for 9/4/15). Attempted direction overall today was down, with lower volume and higher value indicates a strong directional performance. Another text book day as far as the Market Profile concepts go;

Let's go over what happened:
Decent conviction to the upside off the open. The mkt closed the upside gap from 9/1, and took out the naked TPO POC (very prominent one) from 8/31. Prominent and very prominent TPO POC's are considered anomalies and have a strong draw to price returning to them.

Then, we had nice long liquidation for several periods.
The rest of the day following the high was spent adjusting the long inventory from yesterday, and overnight. Sellers were taking advantage of this event and selling every rally pretty much into the close.

The mkt closed the gap from today's open as well.
There is evidence of forcing action on the way down today indicated by the number of anomalies left in the profile. These are created by emotional traders, day timeframe mostly.

We are 1 T.F. higher on a daily basis for 2 days now.

Tomorrow I've heard the floor clears out by half day on this 3 day weekend. Keep this in the back of your mind if you are trading

 

[CJS]

09/04/15 Morning Update. Trading out of balance (relative to yesterday) to the downside with a 37 handle gap.
Gap rules apply.
1) Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2) . Large gaps (10+) may not fill or may fill only partially on the first day. Pay attention to “halfback” of the gap distance.
3) If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.

Should the mkt open and trade with the gap a couple of targets could be pit lows from 9/1 and 9/2 at 1916.25 and 1898.75(which is this weeks low).
A few targets should the mkt attempt to close the gap could be the prominent TPO POC from 9/2 at 1932.25. If the gap closes, the anomalies I discussed in yesterdays recap come into play.

O/N high 1949.25
O/N low - making new lows at this time so I will not post
Prior pit high 1973.50
Prior pit low 1942
Settle 1945.75
Volume 436K as of 0600am PST

 

[CJS]

09/04/15 Recap and prep (for 9/8/15) Lower volume, lower value, and attempted direction being down suggests a slowing market. Last week was an inside week, a form of balance. Combining the short inventory from O/N trade before Friday's open and sellers pushing the market lower in the day session, this contributed to the short covering rally we saw in the PM session.

The selling left a poor low (evidence of traders getting themselves too short), and a couple of anomalies in the profile (evidence of forcing action).

Both the TPO POC and the value area remained in the center of the range from Friday. Which can be interpreted as a balancing day. No real bias for Tuesday as on a daily chart it's obvious the mkt is in some chop.

 

[CJS]

09/08/15 Morning update. O/N inventory is 100% long and currently mkt is trading a 10 handle gap to the upside. I am using Friday's pit session high for measurement of the gap. Mkt is also out of balance to the upside. Once again apply gap rules for today's trade.

1) Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2) . Large gaps (10+) may not fill or may fill only partially on the first day.Pay attention to “halfback” of the gap distance.
3) If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.

O/N high 1961
O/N low 1930
Friday's pit session high 1930.75
Friday's pit session low 1907.75
Volume as of 0545am PST 467K
Friday's settle 1921.25

 

[CJS]

090815 Recap and prep (for 090915). Attempted direction today over all was higher, with lower volume, and higher value (relative to Friday's session) implies a slowing market. Some conflicting info to this assessment is the fact that we held the gap up today, and contrary to the positive side of holding the gap, value nor the TPO POC migrated with price today.

Once again, evidence of forcing action on the way up today, as it left a few anomalies in the profile, a prominent TPO POC being one of them. Anomalies get repaired by being revisited by price during day time trading hours only.

Today's rally was a short covering rally. One indication I mentioned above was how it left anomalies, but another tell is the 'b' formation prior to a short covering rally. These 'b' patterns are formed by traders getting themselves too short. The opposite is a 'p' pattern, when traders get themselves too long (potential for long liquidation. These resulting events do not necessarily have to happen on the same day) I've split my profile out so this pattern can be viewed easily in a graphic.
The last 8 eight days have had some odd behavior - reference the daily chart.

 

[CJS]

090915 Morning update. O/N inventory is net long, but not 100%. Same situation as yesterday, trading a large 10+ handle gap to the upside. Gap rules apply.
1) Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2) . Large gaps (10+) may not fill or may fill only partially on the first day. Pay attention to “halfback” of the gap distance.
3) If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.

A point of interest is the O/N high at 1992. The weekly (pit session) high from 8/28 is 1991. On a weekly level we have a 3 week balance area. I'm applying balance rules to this area.
1) Look above and accelerate.
2) Look above and fail (O/N low on the short term becomes the target)
3) Remain within this balance area and rotate.

O/N high 1992
O/N low 1964
Prior pit session high 1968.75
Prior pit session low 1944
Settle 1966
Volume 267K as of 0545am PST

 

[CJS]

090915 Recap and prep (for 09/10). Today's structure was very poor. This is evidenced by a quadruple distribution (distributions are separated by single print TPO's), and several anomalies. Long liquidation was the game today. Starting w last Sunday's afternoon session, every session (day and night) up to today was accumulating long inventory. Traders who were prepared had several opportunities to get a piece of today's adjustment of this long inventory.

Today's value area remained overlapping to higher, and the TPO POC remained in the upper portion of the range. Was today merely an inventory adjustment? Dalton has said several times that before a mkt can rally it has to break. With the poor structure of the recent profile's I believe it's safe to assume that the longs were weak longs.

The balancing bracket on the daily chart is becoming more obvious, with today's settle (1943.25) putting us for all intent, right in the middle of this balance. With such a wide range today, tomorrow may be nothing but an inside day while the market absorbs the price action today. Something to keep in mind.

If we open tomorrow and continue to the downside, there is a poor low at 1907.75 from 9/4 that may be a destination trade. Also, the bottom of the current daily balance traders could target as well.

 

[CJS]

091015 Morning update. Currently trading a 5 handle gap to the downside. Gap trading rules apply. Seems to the norm' lately.
1) Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2) If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.

O/N inventory appears to be balanced.
Keep in mind should we open and auction to the downside, the potential destinations.
O/N high 1964
O/N low 1923.75
Prior pit high 1987.5
Prior pit low 1935.5
Settle 1943.25
O/N volume 521K as of 0545am PST

I'll be leaving out of town later this am for the weekend. I won't be able to post until Sunday. Have a great weekend!

CORRECTION: I noticed on a couple of my other platform bar charts, the O/N low is actually 1928.5
My profile platform has it incorrect. Once I restarted it, it corrected itself.