09/14/15 Recap and prep (for 09/15). 3 days of overlapping value and balance. Today's profile was extremely wide, leaving a very prominent TPO POC behind. These have a high tendency to be revisited by the mkt at some point. We have a balance forming within a larger balance area on the daily chart. See graphic. I've read a few articles and have heard a few news reports that this weeks FOMC (Thurs) is expected to produce a lot of volatility. I doubt there will be much conviction in either direction leading up to this day.
Market Profile - Daily updates
- Thread starter CJS
- Start date
091515 Morning Update. O/N Inventory well balanced. O/N trade has except for a few ticks, within yesterdays range. Balance rules apply today.
1) Look above or below and accelerate. Either direction would target the bracket extremes discussed yesterday.
2) Look above or below and fail. The opposite extreme of the trading range.
3) Remain within balance and rotate.
O/N high 1949.5
O/N low 1935.25
Prior pit high 1952.5
Prior pit low 1936.5
Settle 1943.25
Volume 281K as of 0550am PST
1) Look above or below and accelerate. Either direction would target the bracket extremes discussed yesterday.
2) Look above or below and fail. The opposite extreme of the trading range.
3) Remain within balance and rotate.
O/N high 1949.5
O/N low 1935.25
Prior pit high 1952.5
Prior pit low 1936.5
Settle 1943.25
Volume 281K as of 0550am PST
Attachments
09/15/15 Recap and prep (for 9/16). Attempted direction today obviously was to the upside, higher volume and higher value implies a very strong directional performance. Today was a classic breakout of balance and accelerate.
Let's breakdown what did and didn't happen and was a vital clue for the rest of the session:
'C' period (I start my profile in A) took out the naked POC's (both TPO and Volume) from 9/9, the mkt found two sided trade in 'D' period, all of this sitting above the 3 day's of balance. Once 'E' opened and sellers couldn't drive prices back into the 3 day balance area, the bulls took over for the remainder of the day. Buyers stepped in two ticks above the balance high. This was a strong signal that we were going higher.
We are now 1 T.F. higher on a daily basis, and out of balance to the upside from the previous 3 day balance we were in. The current destination is the upper extreme of the larger balance bracket at 1981.75.
I don't much follow chart patterns but I notice that on a weekly chart there appears to be a bull flag forming. Not sure if this means anything or not, just thought I would mention it.
Let's breakdown what did and didn't happen and was a vital clue for the rest of the session:
'C' period (I start my profile in A) took out the naked POC's (both TPO and Volume) from 9/9, the mkt found two sided trade in 'D' period, all of this sitting above the 3 day's of balance. Once 'E' opened and sellers couldn't drive prices back into the 3 day balance area, the bulls took over for the remainder of the day. Buyers stepped in two ticks above the balance high. This was a strong signal that we were going higher.
We are now 1 T.F. higher on a daily basis, and out of balance to the upside from the previous 3 day balance we were in. The current destination is the upper extreme of the larger balance bracket at 1981.75.
I don't much follow chart patterns but I notice that on a weekly chart there appears to be a bull flag forming. Not sure if this means anything or not, just thought I would mention it.
Attachments
09/16/15 Morning Update. Good morning. We are well balanced with O/N inventory short but not 100%. Balance rules apply.
1) Look above or below and accelerate. To the upside would target the 2 weekly highs (discussed in yesterday's recap), the 2nd weekly high being the upper extreme of a 14 day balance. To the downside would target yesterdays prior pit low.
2) Look above or below and fail. The opposite extreme of the trading range.
3) Remain within balance and rotate.
O/N high 1972.75
O/N low 1962.75
Prior pit high 1973
Prior pit low 1943.5
Settle 1969.75
O/N volume 235K as of 0550am PST
1) Look above or below and accelerate. To the upside would target the 2 weekly highs (discussed in yesterday's recap), the 2nd weekly high being the upper extreme of a 14 day balance. To the downside would target yesterdays prior pit low.
2) Look above or below and fail. The opposite extreme of the trading range.
3) Remain within balance and rotate.
O/N high 1972.75
O/N low 1962.75
Prior pit high 1973
Prior pit low 1943.5
Settle 1969.75
O/N volume 235K as of 0550am PST
Attachments
09/16/15 Recap and prep (for 9/17). Yesterday's recap talked about the strong directional performance. Today continued that sentiment. Volume pretty much unchanged with higher value is evidence of this confidence.
The mkt settled above the outer daily balance discussed in the 9/14 recap. Also, we broke out the the bull flag pattern I lightly mentioned yesterday. I say light because I don't trade using patterns, just pointed it out because it appeared real obvious and markets are very visual so thought I would mention it.
Let's talk about today's price action as far as the profile is concerned:
'D' period rallied to last weeks high and struggled through 'E' period - good exit point. The following 4 periods (F,G,H,I) was two sided traded, yet traders were able to take out the upper extreme of the outer balance area I've mentioned (this was also a weekly high - weekly/ monthly levels tend to attract intermediate term and higher timeframe traders). All of this was obvious, as a 'this is what 'did' happen' type of analysis.'
Let's point out what didn't happen:
'K' was not able to take out the low of 'J' period, and the afternoon grind higher was the game into the close. This event in 'K' period proved to me that the break in 'J' was a moderate inventory adjustment as opposed to a full on long liquidation. I was expecting more from the liquidation to be frank. At the time 'J' liquidated, the low of this period was exactly half back, another clue that buyers were waiting there.
It's hard to take advantage of these situations as they fly right in the face of recent activity - something I still get sweaty palms and nerves over. But this one paid off for those traders who trust themselves and know these nuances.
The mkt settled above the outer daily balance discussed in the 9/14 recap. Also, we broke out the the bull flag pattern I lightly mentioned yesterday. I say light because I don't trade using patterns, just pointed it out because it appeared real obvious and markets are very visual so thought I would mention it.
Let's talk about today's price action as far as the profile is concerned:
'D' period rallied to last weeks high and struggled through 'E' period - good exit point. The following 4 periods (F,G,H,I) was two sided traded, yet traders were able to take out the upper extreme of the outer balance area I've mentioned (this was also a weekly high - weekly/ monthly levels tend to attract intermediate term and higher timeframe traders). All of this was obvious, as a 'this is what 'did' happen' type of analysis.'
Let's point out what didn't happen:
'K' was not able to take out the low of 'J' period, and the afternoon grind higher was the game into the close. This event in 'K' period proved to me that the break in 'J' was a moderate inventory adjustment as opposed to a full on long liquidation. I was expecting more from the liquidation to be frank. At the time 'J' liquidated, the low of this period was exactly half back, another clue that buyers were waiting there.
It's hard to take advantage of these situations as they fly right in the face of recent activity - something I still get sweaty palms and nerves over. But this one paid off for those traders who trust themselves and know these nuances.
Attachments
09/17/15 Morning Update. Mkt is in balance and O/N inventory is short. Balance rules apply.
Today is FOMC. From what I read, it is a big one. No doubt going to be chop until then.
The last couple of sessions have left poor structure and there are many longs in this mkt as a result. Something to carry fwd should the mkt begin to break. Take note on the upper extreme of the balance from yesterday: 1981.75. Holding above this may provide continued lift. If this level is rejected all auctions will be to the downside.
Be careful. Good luck.
O/N high 1987.75
O/N low 1980.5 (currently trading around this level. Low may be taken out by the time you are reading this)
Prior pit high 1989
Prior pit low 1967
Settle 1987.75
Volume (very light) 180K as of 0545am PST
Today is FOMC. From what I read, it is a big one. No doubt going to be chop until then.
The last couple of sessions have left poor structure and there are many longs in this mkt as a result. Something to carry fwd should the mkt begin to break. Take note on the upper extreme of the balance from yesterday: 1981.75. Holding above this may provide continued lift. If this level is rejected all auctions will be to the downside.
Be careful. Good luck.
O/N high 1987.75
O/N low 1980.5 (currently trading around this level. Low may be taken out by the time you are reading this)
Prior pit high 1989
Prior pit low 1967
Settle 1987.75
Volume (very light) 180K as of 0545am PST
Attachments
09/17/15 Recap and prep (for 9/18). Hope your trade today was well. I'm going to forego a full days analysis as today's news event derailed all technicals, etc.
Let's discuss the close. The mkt settled two ticks above the single prints (separating the double distribution in yesterday's profile). I do not think this was by coincidence. Carry this fwd. Multiple distribution rule: which ever distribution price is accepted in, that becomes the bias; e.g., as in this double distribution situation, if price remains accepted in the upper distribution, this is bullish (I know it's obvious, just stating for context).
Next item of interest; the upper extreme of the weekly balance bracket at the 1981 level. This level proved to be a point of contention for the mkt today every time it traded around it. If you view a 5min chart, you could see this price action. In the AM session it served as solid support. Good trade set ups came from this.
Going into tomorrow I will be treating this (1981) level as a go no/go level even if price is accepted in the upper distribution from yesterday's profile.
If price is rejected and we trade/close lower, this will close out the week on a weekly bar with excess at the highs. This would be strong evidence that the upside auction has completed. However, keep in mind that the next auction can be in either direction.
After a day like today, tomorrow the mkt may be just absorbing today and remain in balance. Also, it is quadruple witching tomorrow too. Be weary of late day games traders play on these days.
Let's discuss the close. The mkt settled two ticks above the single prints (separating the double distribution in yesterday's profile). I do not think this was by coincidence. Carry this fwd. Multiple distribution rule: which ever distribution price is accepted in, that becomes the bias; e.g., as in this double distribution situation, if price remains accepted in the upper distribution, this is bullish (I know it's obvious, just stating for context).
Next item of interest; the upper extreme of the weekly balance bracket at the 1981 level. This level proved to be a point of contention for the mkt today every time it traded around it. If you view a 5min chart, you could see this price action. In the AM session it served as solid support. Good trade set ups came from this.
Going into tomorrow I will be treating this (1981) level as a go no/go level even if price is accepted in the upper distribution from yesterday's profile.
If price is rejected and we trade/close lower, this will close out the week on a weekly bar with excess at the highs. This would be strong evidence that the upside auction has completed. However, keep in mind that the next auction can be in either direction.
After a day like today, tomorrow the mkt may be just absorbing today and remain in balance. Also, it is quadruple witching tomorrow too. Be weary of late day games traders play on these days.
Attachments
09/18/15 Morning Update. Good morning. Overnight trade has the mkt out of balance to the downside with a gap of 18 handles. Gap rules apply 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 lower.
2. Large gaps 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 willprobably be a late day rally.
O/N inventory is obviously short. But keep in mind the past 4 days we have been accumulating longs.
Should the gap not fill and we continue to trade to the downside, I have my eye on the very prominent TPO POC from 9/14 at 1941.50
O/N high 1983
O/N low 1953.25
Prior pit high 2011.75
Prior pit low 1972
Settle 1975.25
O/N Volume 433K as of 0550am PST
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 lower.
2. Large gaps 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 willprobably be a late day rally.
O/N inventory is obviously short. But keep in mind the past 4 days we have been accumulating longs.
Should the gap not fill and we continue to trade to the downside, I have my eye on the very prominent TPO POC from 9/14 at 1941.50
O/N high 1983
O/N low 1953.25
Prior pit high 2011.75
Prior pit low 1972
Settle 1975.25
O/N Volume 433K as of 0550am PST
Attachments
09/18/15 Recap and prep (for 9/21). Higher volume and lower value Friday (adding in that the gap down held too), confirms the day as a very weak. The mkt settled well within the 15 day balance bracket (upper extreme 1981, lower extreme 1889.5).
Thursday was a classic look above (the multi-day balance area) and fail. Friday confirmed that failure. On a weekly timeframe, last week's bar has a confirmed excess high. Excess and balance are the two most important concepts according to Jim Dalton's approach to the Market Profile. I'm using the excess high and the current balance area to form a sideways to down bias. Remember, a look and fail targets the opposite extreme. In this case, that is 1989.5
One of the graphics on the profile today shows how reliable the nuances of the profile can be in determining your entries and exits. I've included notes in the graphic.
Thursday was a classic look above (the multi-day balance area) and fail. Friday confirmed that failure. On a weekly timeframe, last week's bar has a confirmed excess high. Excess and balance are the two most important concepts according to Jim Dalton's approach to the Market Profile. I'm using the excess high and the current balance area to form a sideways to down bias. Remember, a look and fail targets the opposite extreme. In this case, that is 1989.5
One of the graphics on the profile today shows how reliable the nuances of the profile can be in determining your entries and exits. I've included notes in the graphic.
