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Oh man! What did you have to say THAT for? I had been picturing you tied to your trading desk, relentlessly pushing buy/sell buttons, when not programming new stuff or answering messages
Still moving up, still biased long, still looking for a pullback to a local support level for a push up but also waiting for a more major pullback.
From a weekly perspective we do have a lesser traded area at 2138 and I'm still looking at 2101.25 we had earlier in the week.
Yesterday we had a lot of volume traded overnight from 2139.50->2141 - we extended above that and came down and that overnight area became support but it was very slow and not a lot of commitment.
So we are getting the right sort of reaction but not really with much participation. So we may need a deeper pullback to get long traders excited again.
Plan
- look for local (yesterday/overnight) support levels for a push up
- if we do start to move down, go with but expect support at one of the longer term levels
- let the market play out at first, it is grinding up but starting to feel a little tired
Weekly Numbers Range 2120 – 2149.25
Value 2121.75 – 2142.75
S1 – 2018.25, R1 – 2137.50
Daily Numbers
Range 2128.50 / 2138.25 -> 2149.25
Value 2143.25-> 2149.25
Globex 2142 -> 2148.75
Upside speculation was quite evident in the Order Flow as we broke the highs earlier this week. We have stalled for the moment, so we need to think about what will bring in more speculators to the upside or conversely, what conditions will make people think the move is over.Still moving up, still biased long, still looking for a pullback to a local support level for a push up but also waiting for a more major pullback.
The larger white box shows the range we have been in since Mid March. As we discussed last time, it appears that now the Brexit news has been digested, we’ve finally managed to break out of that range. On a break like this it would be quite normal for us to drop back and test the high of the old range before progressing. The smaller upper white box with a high around 2110.75 looks like a good candidate for that fall back from a long term perspective.
This is the Market Profile for this week. We can see a large distribution built up this week from 2139 to 2149.25. As of writing – 3am EST, there has been a pop up to 2159.50 so far. So now the high of this large distribution is key. If we come back to 2149.25 in the US day session and it holds, we can expect upside order flow imbalance as speculators see the level hold and see opportunity to the upside. Conversely, if we start to trade through it, we can expect to continue to rotate around the 2139-2149.25 range.
Looking at Tuesday and Wednesday daily market profiles, we can see they both look non-directional. This was very different to Monday. We’ll take a look at why Monday was more attractive for speculative trade in a second. First, we can also see the large pop up overnight. We now need to build volume there – if you take a look at the volume traded for a second:
We can see that not much volume has traded (column 2) from 2146.24 to 2155. So if we dip below 2155, there is a good chance we’ll see 2146 fairly quickly. So careful if you are long there.
So the story so far. We have seen a pop through a medium term range, we’ve slowed down over the past 2 days but overnight we are seeing a new pop to the upside. That pop needs to consolidate and we need traders in the US session to support those prices.
A look at Monday’s Order Flow Participation
On Monday we were looking for a test and at point “A” above, we can see we came down and tested the green line, which was the prior days high. This is a level that a lot of day traders look at. You can see that when the level held, many traders jumped in long and by point B, we had traded 168,000 contracts and moved 9 points. In the frame below, we can see a large shift to the upside in the Cumulative Delta (it measures buy market orders minus sell market orders). So we had already broken the high, we came down to an area lots of traders watch and then we saw massive order flow to the upside after it held. This is EXACTLY what we’ll be looking for over the coming days to take continuation trades to the upside. In fact, remember that most days we swing up and down, so it’s what we want to see to the downside too – just that now my bias is long.
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If we look at yesterday, we did not see the same sort of excitement after hitting the low of the day. The early part of the day was indecisive. Basically, we were just trading within yesterdays range. The market chopped around. When we hit the lows, we were just short of the 2139 level in the large distribution from the weekly profile above. So we were basically probing the bottom of a trading range and that’s simply not as exciting. Now- had we popped the top of that trading range, no doubt we’d have seen significant order flow to the upside after the pop. This is counter to most traders instincts – to actually buy a market AFTER a move up. In this case, we did have a trade location at the bottom of the range. But we had to wait a long time for it and it would have been a hard trade to hold onto because of all the counter moves.
Plan
Biased to the upside
Only take short trades if significant selling (imbalanced order flow/high volume) is evident – we still may need to test 2109 before we can get to 2200
Look for a test at the top of the 2 day range (2149.25) and for significant participation upside if we get that
If there is no test, look below for an area of high volume in the profile to play off, don’t expect the same sort of reaction
If we keep these highs into the stock market open, it means the S&P futures have moved way ahead of the stock market and that ‘balance’ needs to be addressed at the open. This could mean an initial move down or just generally whippy action – so it may be better to sit out the first 15 minutes of trade.
Be wary of a rapid drop if we trade below 2155.
Weekly Numbers
Range 2120 – 21.75
Value 2130.25- 2151.75
S1 – 2018.25, R1 – 2137.50
Daily Numbers
Range 2139.50 -> 2150.75 / 2152.25
Value 2143.25 -> 2147.75
Globex 2142.75-> 2161.50
Great commentary on your posts DT! I am not yet very familiar with market profiling charts, so your daily explanations of an instrument I am familiar with are helping me come up to speed.
Still working upwards but not with much excitement and I'm still looking for us to drop back and test the old highs or build some volume for us to move up from.
After yesterdays move up overnight we basically sat in a range and now we have a triple distribution week. So looking for 2150 for support and if not, I think it's likely we'll start filling out the range. So in that case, we'd be looking to hit 2139 and then rotate upwards.
We can see the big pop up overnight which was followed by fairly poor action and we didn't really get to any significant prices. Today we look set to open slightly lower than yesterdays close.
Plan
- Looking for a pullback to 2150 - if that fails, expect to see 2139 before rotating up - basically just filling in the weeks profile
- if we move up off the open, will be looking to go with any volume that comes in above yesterdays high
- not to interested in going long into yesterdays day session high (2163) on a move up from the open - need to
- wary of a headfake above 2163
- end of the week - could be dull...
Weekly Numbers
Range 2120 – 2168
Value 2135.75- 2165.25
S1 – 2018.25, R1 – 2137.50
Daily Numbers
Range 2142.75 / 2152.75 -> 2163 / 2168
Value 2156.50 -> 2161.50
Globex 2142.75-> 2159
We have run out of steam to the upside. So now we wait for a break. Looking for headfakes/probes out and trying to discern if they are breaks or not.
We can see the upper of 3 distributions starts at about 2151.50. So anywhere from 2150 to there, I'll be looking for the market to hold.
If we get through 49, I'm expecting us to work our way down to 39 but that would not necessarily mean we are done to the upside. 62.50 is where volume tapers off above us, so the fade would be anywhere from there to last weeks high.
Not much to say here - we can see the probe down on Friday goes all the way to 2149 so it looks like a little leeway is needed to the downside.
Plan
- Market is in a range - waiting for a breakout.
- look for absorption at the extremes, around 62.50 at the top, around 51.50 below. As with all ranges, we have to live with the fact it could fall short or poke through and turn around
- Consider a break with high volume to be real and try to get in on a restest of the 51.50-62.50 area
- if retest on a break is missed, slap self in the head and stalk a pullback only if volume is still heavy on the side of the break (just worried we'll run out of steam if we do break)
Weekly Numbers
Range 2120 – 2168
Value 2138.75- 2163.25
S1 – 2130.75, R1 – 2169.75
Daily Numbers
Range 2149 -> 2164.25 / 2164.75
Value 2151.50 -> 2159
Globex 2153.50 -> 2163.25
and we can see volume really dropped off yesterday. There was no break, so same deal today.
From yesterday
Same today - 62.50 was yesterdays high but we only made it as far down as 52.75 - still, that's ranges for you....
Not much to see here - although it's worth looking at yesterdays value area as we go into today - give it a few ticks leeway there as we have a probe down just below that in the afternoon yesterday.
Plan (this may look familiar as it's copied from yesterday....
- Market is in a range - waiting for a breakout.
- look for absorption at the extremes, around 62.50 at the top, around 51.50 below. As with all ranges, we have to live with the fact it could fall short or poke through and turn around
- Consider a break with high volume to be real and try to get in on a restest of the 51.50-62.50 area
- if retest on a break is missed, slap self in the head and stalk a pullback only if volume is still heavy on the side of the break (just worried we'll run out of steam if we do break)
Weekly Numbers
Range 2120 – 2168
Value 2138.75- 2163.25
S1 – 2130.75, R1 – 2169.75
Daily Numbers
Range 2152.75 -> 2162.50 / 2163.25
Value 2158.25 -> 2161.75
Globex 2151.25 -> 2161
