Market Profile - Daily updates

[CJS]

09/28/15 Recap and prep (for 9/29). We are out of balance on both a weekly and daily level to the downside. Value and the POC's (TPO and Volume) both migrated today with price. This is very weak. Take notice in the profile graphic every rally that caused the cessation of 1T.F. lower was met with sellers. The structure of the profile is not evidence of longer term traders as there were 4 distributions and several anomalies left behind. A profile that displays evidence of longer term traders is usually more symmetric.
However, the volume today was the second highest since we've been in this 20 day balance bracket. I think there was a combination of short and intermediate term traders in today's session.
I have no short term destinations to the downside. The nearest target is the weekly low of 1821.75 from week ending 8/28.
I would say that if we can find acceptance above the balance bracket/ weekly low at 1889.50, this would could cause a short covering rally. Anything else would be negative and the downtrend will very likely continue.

 

[CJS]

09/29/15 Morning Update. Overnight session is in balance with O/N Inventory appearing to be balanced as well. Balance rules apply. With yesterday being a large range, today may be rotational as the move from yesterday is digested.

O/N high 1886
O/N low 1861
Prior pit high 1911.75
Prior pit low 1868.75
Settle 1871.5
Volume 353K as of 0545am PST.

 

[CJS]

09/29/15 Recap and prep (for 9/30). Volume almost unchanged, price unchanged and a very prominent TPO POC all translate to a day of balance. The best trade of the day in my view was when buyers ran out when price hit the weekly low of 1889.50 from the week ending 9/4. The rest of the day was spent with an attempted direction being down.
I dont see decent excess on the lows (only 2 ticks), so the current auction to the downside may not be over.

If you review the split profile in detail, you can see how today was alot of two sided games. It was easy to expect because the TPO POC was wide and when it is wide, the odds of continuation in any direction are diminished. Examples:
1) The attempt for the lows of the day beginning in 'F' period. Sellers were successful in keeping the 1 T.F. lower until 'H' period. At the time, price was just below value area low (VAL). Once 'H' opened up, price came back to and through the TPO POC, widening it even further.
2) 'I' period buyers attempted to rally the mkt. Traders unaware of the odds of continuation surely thought price would continue to the upside. Only to have it come back again and through the TPO POC - again widening it even further through 'J' and 'K' periods.
3) The 'G/H' low was a poor low. Intraday this had a possibility of being repaired. It was repaired in the 'K/L' periods.
4) Price continued to the downside, all to come back up and settle at the open.
In all, every period except 1 (L) was a part of the TPO POC.
For now, the mkt has accepted the lower prices. I mentioned yesterday that remaining below the 1889.50 level is negative for the bulls. This proved itself today.

 

[CJS]

09/30/15 Morning Update. Good Morning. The overnight session is out of balance to the upside relative to yesterday. Since the 1898.50 (Weekly low from 9/4) proved to be a level of resistance yesterday, I'm considering it bullish if we can remain above it and bearish if price finds acceptance below it. Currently we have a gap of approx 7 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 higher.
2. Large gaps (this is not really one) 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 inventory is net long but not 100%. Inventories are adjusted by trading to the settle. Although an adjustment may only be partial if there is an attempt at correcting it.

Keep in mind also that yesterday's TPO POC (1877) is very prominent. These have a tendency to attract price.

O/N high 1900.25
O/N low 1871.25
Prior pit high 1889.75
Prior pit low 1861.50
Settle 1874.75
Volume 279K as of 0545am PST

 

[CJS]

09/30/15 Recap and prep (for 10/1). According the to table of directional performance from the book Mind Over Markets; today's attempted direction up with lower volume and higher value implies a 'slowing' directional performance. This is where I get the assumptions I post in recaps about the days performance.

Yesterday left a very prominent TPO POC (all but 1 period contributed to it), and today left a prominent TPO POC. (very prominent is determined when 75% or more TPO's create the POC). With this in mind and today's directional performance indicating a 'slowing' mkt, should tomorrow or the next begin to trade to the downside, I will be looking for these POC's to be repaired (remember, TPO POC's are a form of an anomaly, which are repaired by daytime hours only).

Let's discuss today's price action in detail:
The opening drive appeared to be a 'go with' open as the lows were rejected quickly. The high was established on exhaustion volume and profit taking (I use a set of 3 non-correlated proprietary indicators from emini-watch.com in my methodology, one of them identifies exhaustion volume ((buying and selling)). Combined with Market Profile concepts, for me, it really provides an edge). From this point on I was suspicious of upside continuation. I also considered the fact that we had an open gap and O/N inventory net long. After almost an hour of the bulls not getting much at all for the efforts, the mkt liquidated, all the way down to once again, the weekly low that apparently I am not the only trader who is still using this level as a go no/go level (1889.50). Price was rejected below this level and after a short time, it was obvious the bulls took this level as a great price to get long - because the rest of the day (until the last 15 min) was bid.
Another contributing factor to the rally, was rule 3 of gap rules: If the gap closes and value cannot get to at least overlapping, a late day rally in the direction of the gap has favorable odds. Value was never close to overlapping.

Summary: We are back inside the multi-day balance bracket. The last two days I'm viewing as a look below and fail. Balance rules state that when this happens, the opposite extreme becomes the destination. This level is the 1981 level.
I've also drawn (graphics attached) a down trend channel on my Thinkorswim chart (30min) that you may find interesting. I drew another on a daily chart. Tomorrow will be interesting. We've ended Q3 (this month was an inside month) and I'm hoping we start Q4 with a nice rally.
I hope this info has helped at least one person.

 

[CJS]

10/01/15 Morning Update. Good morning. O/N inventory is net long. By the time the mkt opens we may or may not be trading a gap. Apply gap rules if there is one. Currently there is a 2 handle gap. Value O/N is in the upper portion of the profile. If we open and continue upside trade, my targets are from 9/25:
1) The single prints at 1928
2) The naked POC at 1936
3) The pit high 1942.5

If we trade back into yesterday's range, targets are:
1) Settle at 1903
2) Naked POC 1900.5
If we get beyond that, then I will incorporate the anomalies left from yesterday into the plan.

O/N high 1929.5
O/N low 1901.25
Prior pit high 1910.50
Prior pit low 1886.5
Settle 1903
Volume 338K as of 0545am PST

 

[CJS]

10/01/15 Recap and prep (for 10/2). This may be a short recap, I only traded the am session and am leaving for the boat races at Lake Havasu, AZ right about after I post today and will be gone the weekend. So no reports until hopefully Sunday.
The most important thing I want to highlight today is a perfect trade. These Market Profile concepts was the reason I was able to anticipate and expect this set up. After the early morning high the mkt came back down to the open, through it and continued all the way to yesterday's prominent POC - in B period. I also had indications of exhaustion selling around this price area on my indicators. Once C period opened, there was a good rally off the early lows (some 11 handles. 9 of which could've been had with very good trade location and risk with an exit right under yesterdays pit high). I am not conditioned to hold trades that long. However, I got a good piece of the whole swing of things, 2 pts towards the POC. And 4 pts in 2 separate trades on the way up. My day was done.

The reason as always when I highlight specific's that I post is to point out that these concepts are reliable and they work. Hopefully they spark interest in someone to study Market Profile as J Dalton teaches it. It's worth the effort, especially in the emotional capital department.

Today's profile:
1) We are now 1T.F. higher on a daily basis for two days now.
2) We are above the down trendline on a daily chart. There is decent excess lows (put another way, secure lows) on today and yesterday.
3) Value is higher along w price. This is positive for upside continuation.
4) We have a poor high, and a TPO POC that has remained exactly in the center of the profile. This may be negative short term for upside continuation. Because, the poor high is evidence that traders got themselves too long, and the POC being center is evidence that this level 1903.75 was the fairest price today.
Good luck in your trading.

 

[CJS]

10/05/15 Recap and prep (for 10/6). The only item that is negative about the last two sessions in the day timeframe, is the structure of the profiles. They have several anomalies which is evidence of forcing action/ emotional trading. The structures are weak. So if there is a cessation of 1T.F. higher, the 'repair' could be quick and violent. But as long as the 1T.F. higher prevails, these anomalies are a non issue.

The gap held today and all majors held bid throughout the day. Very positive for upside continuation. The 1981 level is obviously within traders sights. This is a go no/go level as its the top of the 28 day balance bracket. The market has made 4 other attempts at trading above the upper extreme (1981.75) and have failed. Tomorrow will be a very interesting day. Because, this level has been a level that I believe all timeframes have been watching as it has proven to be a level to either stay above or below on the Monthly, Weekly, and Daily charts.

 

[CJS]

10/06/15 Morning Update. Good Morning. Trading in balance. Balance rules apply. Overnight inventory is net short but not 100%. I will be paying close attention to the 1981 level. If price finds acceptance above this level, then there is definitely a change of market thinking.

O/N high 1975.25
O/N low 1963.5
Prior pit high 1980
Prior pit low 1955.25
Settle 1975.25
Volume 195K as of 0555am PST

 

[CJS]

10/06/15 Recap and prep (for 10/7). Today's attempted direction being down, with lower volume and unchanged value is evidence of a balancing and strengthening market.
Today we had a look above and fail (early morning high two ticks above the 1981.75 level). This is one of the balance trading rules. It also states that the opposite extreme becomes the target on a look above and fail. Traders didnt quite get that, but were able to take out the O/N low.
The rest of the day was chop and two sided. I was really hoping for more from the bulls today. If we open tomorrow and do not make another attempt and finding acceptance above today's high/ 30 day balance bracket upper extreme, the destination trade becomes the lower extreme at 1889.50. There are several targets along the way;
The gap left from yesterday is one.
The anomalies left from 10/2 are others as well.

Just because there is a destination trade doesn't mean the mkt will reach it. So along the way we identify intraday targets as potential entries and / or exits.
Carry fwd we are still 1T.F. higher on a daily basis for 5 days now. This is positive for upside continuation. Until we see a cessation of this, all auctions remain to the upside.