Slow, very boring day. I "knew" this morning that 92 was the place, but between not feeling right with market profile, my computer acting weak, not having slept much all week, etc, I allowed uncertainty to get the better of me.
My guess is Ryan held that trade...
NT did not calculate P&L right...
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Going back to this, I believe today part of my confirmation was this profile shape to trade long into the close. Nearly all of the volume was below the POC, with above the POC basically a flat line. In my view "out of balance", with shorts above POC stuck.
Last edited by GaryD; March 14th, 2013 at 03:35 PM.
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Nice job at the close Gary. I am long ES and also "hoping" (the word which has no place in trading) that we will see the all-time s&p close touched today -- got 3 points shy of it this morning and hard to believe they won't try again but hey, these are crazy markets and anything can happen. I'll wish for a little of that bullish crude action to rub off so I can get my target
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This is a major switch for me this year, but I do not watch anything but crude anymore. I might pull up a chart after hours, but during live trade there is nothing else going on but CL. I used to try to get some correlation advantage and constantly monitor ES and 6E, and that did sometimes work well, but I decided I can see whatever I need to see in the market I am trading. Correlation comes and goes, adding to what Dalton I think called "cognitive dissonance" (great advice in my opinion).
The only way I knew equities were at their highs was from the headlines. lol!
What is your thought on the profile shape I mentioned? Would you feel the same?
If you mean post 343, then yes it makes sense. But earlier you mentioned about short covering. This is a Dalton thing (I think) and I do not really subscribe to it, though I do see some of the logic in it. In his theory, a short covering profile like this (which, given that probably several were short from the last two prior days) means more downside to come. But the way it finished, I don't think it would qualify, since there was range extension up at the close, but maybe I'm wrong. Either way, that way of thinking does not factor into my decisions very much, if at all. Maybe I'm biased against it because it's so pattern recognition oriented; I see people everywhere talking about 'B' and 'p' and 'b' shaped profiles, and it kind of turns me off. I have seen too many counter examples to put much faith in labeling a 'p' profile after a down day a "short covering rally."
But in post 343 you said that "nearly all the volume was below the POC" when in fact nearly all the volume was within about 10 ticks higher and 20 ticks lower than the POC. I think what you mean is that there is a long tail below the big fat distribution centered around 92.80. In the graphic below, you can see that D, E, and F period lows were all around the A period high. The open was a few ticks off the low, and the fact that A was never again traded indicates a very strong demand. Competition was high for prices below 92.60, and you only got them if you took the small window of opportunity that existed for only a few minutes at the open. Competition means low volume and small windows of time, just like when something is on sale, it doesn't last long because inventory is bought and prices go back to normal.
An open that low near the LOD, D, E, and F not being able to get lower, and value established higher means it is VERY unlikely (in my book, maybe 10%) that a low like that will be revisited again in the day. So, all a good recipe for an auction higher to see if more value can be found up there. It was a good play, great job getting in there.
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