Market Profile Analysis of S&P Futures – 04.12.17…

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.

For now a massive “look below and fail” as S&P futures prices dropped below a the low of a large balance area yesterday only to fail to find new money sellers that would continue to take prices lower. An afternoon rally brought the settlement back within 1.50 of the prior day and notched the 6th of 7 trading sessions where the settlement was almost equal. Value was, however, lower.

What’s most puzzling about this market is that the normal course of action would be that futures should be much higher right now. Currently we are gapping down 4.75. I say this because generally a look below the low of a large balance area that fails to move lower gets all parties involved overly short and there is usually a large flurry of short covering back to the opposite end of the range. We got such a rally yesterday afternoon but with no follow through. Yesterday’s low at 2333.25 is the new downside reference point.

Overnight inventory is balanced which is also noteworthy as it tells us that overnight futures pushed back pretty high back up into range before failing back lower. Overall, we’re in a market that really has no idea where it wants to go other than to continue to stay here. This cannot continue forever obvious and at some point there will be acceptance either above or below this range. As we are nearing a holiday in the markets this may continue into the end of the week. It’s not possible to predict when balance will end. It’s only possible to be ready and have a plan as to what you will do when it does. Any such plan should always include a contingency measure for failure to hold the breakout. Most traders don’t have any such plan until it’s too late and that’s what is causing the continual reversals that we are currently seeing. A large contingent of short term traders continually shifting from overly long to overly short.

The overall range was somewhat expanded yesterday. Thus responsive trade could be in the cards and profile references may be inflection points.

Have a wonderful day,
peter