Market Profile Analysis of S&P Futures – 03.21.17…

Market Profile Value Areas and POC figures for /ESM7 and /NQM7 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.

Yesterday’s early move higher stopped right dead on the volume POC. This is an important nuance to carry forward as moves that start at nuanced and very specific market profile references are moves that automatically should be suspect and are generally retraced soon after. Note how the market had difficulty moving lower yesterday and today we are gapping up 4 points currently. My early inclination is that yesterday’s high gets taken out and the market will revisit the double TPO POC area that I mentioned in yesterday’s blog which is in the 2377-2378 range.

Overnight inventory is relatively balanced and although it’s very early in the morning if we were to open here we would open within balance and within yesterday’s VA. The most important thing about any market is always the overall feel. Think in terms of the three questions and start with the first every day. What is the market doing? Note that this is not “what do I think the market is doing?” or “what do I want the market to do?”, but simply “what is the market doing?” In my (not always so) humble opinion I think it’s balancing. I think that the current state is consolidation of the large advance that began on February 9th. Furthermore, I continue to carry forward the very poor all time high that occurred on March 1st and am expecting that it will be crossed at some time in the future.

Responsive trade seems to be the M.O. and the path of least resistance to profits in the current environment. That means when the market starts to rally, check the internals, check your cumulative tick, check the tempo, and if it’s not confirming then look for the next area where it should turn. Same thing on the downward moves. Yesterday was a perfect example of how the market tried to sell off in fits and starts while also having some larger liquidation breaks which I’m sure scared less astute traders than the readers of this blog. The net effect however was an SPX cash that was down less than 5 points while the NDX was up almost 5. Push….pull….push….pull.

Here is an all day picture of the cumulative tick from yesterday that I posted on My Twitter.

Did I trade /ES yesterday off of this information? No. I didn’t see anything in the choppy environment that would warrant a trade and I wasn’t interested in scalping for a few ticks. What the indicator did do for me was allow me to just hold my NTES and SPX positions without adjustment. Both are long delta so a larger selloff would not be good for me. Everything that we discuss here in the blog is applicable to everything in your portfolio including all option positions on individual stocks. I think many of you have this false idea that I trade the /ES very heavily and every day. While I do that from time to time, I feel that it’s a strategy/edge/style that you really have to be committed to on a daily basis not just here and there. I simply have too much on the line with other longer term (2 days to a week mostly) positions to commit myself to that fully most times. Instead I use what I’m teaching here to enter my positions at the exact optimum times and then manage them more intelligently than the competition because I’m not jumping out or making adjustments on every little liquidation break or short covering rally. That is worth it’s weight in gold.

Have a great day and honestly if you haven’t purchased cumulative tick yet please, for the love of God, get it! It’s not about the money, I’d give it away free if I wrote it myself. It’s about the fact that I want people to stop being surprised about the market and stop thinking it’s random and can never be understood. The entire ShadowTrader methodology frim the start (internals, core sector list, market profile, t/a) has been nothing more than that. Just a way of looking at things objectively, a “reality enhancement field” if you will. Come on in………………

-peter