Overnight Head and Shoulders

We’ve seen a pretty aggressive overnight session thus far in the ES globex.  The main feature of the session is two impressive rotations higher followed by a third not impressive attempt higher all coming together to form a head-and-shoulder pattern.  Interestingly, all of this activity is contained within yesterday’s range, occurring in above the midpoint of the session MOSTLY.

Yesterday I was making a fuss about the normal day we were seeing on the market profile because unlike the name, the occurrence is anything but.  A normal day has a wide base from aggressive early entry of a market participant followed by disruption of the intial balance (first hour of trade) both to the upside and downside.  It’s a strong signal that the market lacks directional conviction and the play is to aggressively fade the second range extension back to the mean.  It had about 5 handles of profit built into it.

Going into today, we know the market lacked conviction, we know it’s overbought on the stochastic or RSI or CCI or Keltner or Bollinger band studies and we also know it’s been up all week.  Therefore, I’m looking for sell orders to flow into the market.

It won’t be anything to get excited about, but we should keep in mind the proclivity to book profits into the weekend, the globex HnS, and the normal day.

Here’s the levels I’ll be working this morning:

ES_VolumeProfile_05102013

 

4 Responses to “Overnight Head and Shoulders”

  1. Sellers? I’m unfamiliar with suchness.

    I remember the good ol’ days when whimsical notions such as “supply” and “demand” had an effect on the pricing of securities.

  2. I have an old saying “There’s lots of ways to skin a cat, but you still end up with a pelt”.

    Great to see you back here…

  3. by the way, that comment was intended for the previous post “The Game Plan Henceforth” – still on my first cup of coffee

  4. stockcats it feels good to be back, thanks for stopping by.

    eliza: balance-imbalance-balance

    we’re still in balance and the selling hand is weak until it isn’t.

Comments are closed.
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Overnight Head and Shoulders

We’ve seen a pretty aggressive overnight session thus far in the ES globex.  The main feature of the session is two impressive rotations higher followed by a third not impressive attempt higher all coming together to form a head-and-shoulder pattern.  Interestingly, all of this activity is contained within yesterday’s range, occurring in above the midpoint of the session MOSTLY.

Yesterday I was making a fuss about the normal day we were seeing on the market profile because unlike the name, the occurrence is anything but.  A normal day has a wide base from aggressive early entry of a market participant followed by disruption of the intial balance (first hour of trade) both to the upside and downside.  It’s a strong signal that the market lacks directional conviction and the play is to aggressively fade the second range extension back to the mean.  It had about 5 handles of profit built into it.

Going into today, we know the market lacked conviction, we know it’s overbought on the stochastic or RSI or CCI or Keltner or Bollinger band studies and we also know it’s been up all week.  Therefore, I’m looking for sell orders to flow into the market.

It won’t be anything to get excited about, but we should keep in mind the proclivity to book profits into the weekend, the globex HnS, and the normal day.

Here’s the levels I’ll be working this morning:

ES_VolumeProfile_05102013

 

4 Responses to “Overnight Head and Shoulders”

  1. Sellers? I’m unfamiliar with suchness.

    I remember the good ol’ days when whimsical notions such as “supply” and “demand” had an effect on the pricing of securities.

  2. I have an old saying “There’s lots of ways to skin a cat, but you still end up with a pelt”.

    Great to see you back here…

  3. by the way, that comment was intended for the previous post “The Game Plan Henceforth” – still on my first cup of coffee

  4. stockcats it feels good to be back, thanks for stopping by.

    eliza: balance-imbalance-balance

    we’re still in balance and the selling hand is weak until it isn’t.

Comments are closed.