Picking up right where we left off, we observed what appeared to be a large seller at work Friday afternoon. It seemed as if the seller backed off from the offer toward the end of the day which finally allowed the immense amount of pressure on the offer to push price higher. The buy flow carried a bit of follow-through into Sunday evening’s globex session, but as America wakes up the index futures have pared back their gains and are trading back in the whale’s wheelhouse.
The resulting action has left a few thousand contracts worth of excess above our current trade price levels. It will be interesting to see how the market behaves early on in relation to the range from 1756 – 1754. If price trades these levels early on during RTH we can gauge the seller’s conviction early on this week.
The trend is still up, the indices do not often make swing highs during the afterhours, and there is plenty of support below. Therefore it is prudent to respect the trend of the timeframe you are trading when observing these very short term market activities.
I have highlighted some key price levels and drawn out a few scenarios on the following market profile charts:Twitter