Market Profile Analysis of S&P Futures – 04.25.18…

Value Areas and POC figures for /ESM8 and /NQM8 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.

I thought it made sense to include some breakfasting bears as the featured image this morning, given yesterday’s action.

www.windotrader.com/shadowtrader

Yesterday’s large break was on very poor structure which should be carried forward. I am saying only that, nothing more. The market profile from yesterday is split into three distributions with large amounts of single prints separating those areas. The tops and bottoms of those spikes are always to be noted as possible turning points on a rally. Where the next day trades in relation to the distributions is also of note. If within the lowest, very bearish, in the middle not so much, and if in the upper then can be construed as a negation of the prior days action.

As of now overnight trade is confined to the lowest of the three distributions with the majority of the action below the settlement. Overnight inventory is net short but not 100% so.

If the RTH price action is similar to the overnight session, that would be bearish as it would imply that these lower prices are being accepted and the market is just balancing a bit.

I believe that overall the market now wants to move back to the balance low at 2552.00 in the S&P futures (/ES). This will take time and “work”.

The ONH at 2639.75 is the first upside reference. A weaker market will not take this level at all, a stronger one (read: short covering) will and will push up to maybe halfback at 2650.00. The ONL at 2618.25 and just a little past that the RTH low at 2616.00 are the downside references. Obviously with the RTH low so close to the Overnight Low you would wait for the lower area to break if looking for a new initiative short.

Yesterday’s selling had little relief so keep that in mind. Shorter term traders are overly short out there and volatility moved up a decent clip yesterday.

In closing, I just want to mention that I’m carrying forward that the value area extends all the way down to the low of the day. That usually doesn’t happen that way. In yesterday’s distribution I’m reading into that that more volume obviously came in within the lower ends of the distribution. That is more bearish than if we had a large spike at the lows and the value area remained in the upper distributions.

Beyond that, remember that the day after a trending day is usually not a trending day. If you made money very easily yesterday by getting short somewhere and staying short, the odds don’t favor that today will have the same dynamic.

Have a great day,
peter