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Market Profile Analysis of S&P Futures – 09.15.17…

Value Areas and POC figures for /ESZ7 and /NQZ7 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.

Welcome to options expiry, we got fun and games…

There was a tiny little excess high (which would fit in the category of lack of material excess) yesterday that repaired the prior two session RTH highs. While it’s easy to see this as look above and fail, and technically it is, I believe that it’s the overall feel of the day that matters a lot more. The market just ground around all day yesterday on slow tempo and relatively low volume. Brad noted that only 573,000 e-mini S&P’s had traded at 11am EST. Those who consistently pound the table for a correction should ponder that one man’s poor high is another man’s consolidation. While continued knocking on resistance and not getting a breakout IS clearly a sign of traders getting longer and longer, one should never assume that a liquidation break is a foregone conclusion. Sometimes a market is pausing at the highs before higher and sometimes it’s long in the hole which increases the odds of a break greatly.

Coming into this morning’s action we have two back to back prominent TPO POC’s close to each other, indicative of a lot of balance up at these all time high levels. Overnight trade is indicating a gap down of about 3.50 in the S&P futures and 7.75 in the Nasdaq 100’s. There was some news last night which took futures down to the gap low to the tick and they have since recovered. Don’t gloss over the fact that the ONL is right at the bottom of the gap. Stronger sellers are simply not present here as of now.

Overnight inventory is 100% net short this morning, however as of now we would be opening within balance, thus the gap is nothing to be too concerned about.

I believe that ONL discussed above is the key reference point for today. Anything above is nothing more than status quo.

I’ll have more detailed comments on the SquawkBox this morning as I’m taking over the duties from Brad all day. As nothing changed value-wise yesterday, assume that all previous comments still stand unless we find acceptance outside of this range. Today is options expiry which also generally makes for choppy, rangebound trade. I make it a rule not to trade /ES on OPEX days, something that has served me well over time.

Have a great day,
peter


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