Market Profile Analysis of S&P Futures – 01.31.18…

Value Areas and POC figures for /ESH8 and /NQH8 Futures are posted free every morning HERE. Click on any posts in the list on the left pane to see them in the main window. Don’t click on the ST logo as it will just refresh the page and you’ll get only the topmost post over and over. Click on the title or text.

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I’ve annotated all the main points on the market profile graphic above. All of them could be in play today with the recent uptick in volatility.

ONH and yesterday’s RTH are almost the same and are the upside reference. Acceptance above that level brings the large gap above us into play. Remember that gaps are like a vacuum or void. Prices can move through them very quickly as there is little resistance there.

Futures are gapping up over 10 right now but we are slated to open within range as of now. Overnight inventory is definitely net long but not 100% so.

While the overall point loss was large yesterday, the profile distribution was not elongated to the downside and a good portion of the loss was in the gap. There was also excess on the downside. Thus job one today is to constantly monitor where value is developing. Equal or lower is bearish, within the gap is less bearish. A truly weak market will not fill the gap just yet. A stronger one will have some acceptance within the gap but not all the way, and a move that would negate yesterday would have value breakaway clean to the upside and fill the gap fully.

lI’ll have more comments in the SquawkBox in the premarket at 9:15am EST.

-peter

PS: Check out the new James Dalton intensives which are starting at the end of February. There’s a Valentines Day Discount in play right now until the 14th. If you want to take your understanding of the profile to another level, I highly recommend one or both of these.