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Market Profile

NASDAQ Game Plan for Fed Minutes Wednesday

For the second consecutive day the NASDAQ is coming into the session gap up. The globex session featured a slightly elevated range on normal volume. Price spent several hours grinding sideways along the low print set yesterday before a strong buying pushed entered early this morning. At 7am, MBA mortgage applications came in stronger than expected. Housing Starts at 8:30am was weaker than expected but Building Permits better.

Also on the economic calendar today is the Crude Oil inventory at 10:30am. Then we have the high impact FOMC minutes at 2pm this afternoon.

Yesterday we printed a neutral day. Price started the day out strong but sellers defended the low from last Thursday. As soon as we entered the Thursday range price formed an excess high. After some big chop, sellers prevailed and pressed through session low to print a neutral day.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4570.25. Look for buyers to step in and two way grind to ensue until we hear the FOMC minutes.

Hypo 2 buyers use the gap up to go higher. Price holds north of 4580 and buyers take out overnight high 4589.75 setting up a move to target 4616 before two way trade ensues.

Hypo 3 sellers close gap down to 4570.25 then take out overnight low 4556.25. The profile is thin down here. Look for sellers to accelerate down through the low and trigger a liquidation down to 4514.25 before two way trade ensues.

Levels:

11182015_NQ_MPVP

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Speed Traps Both Ways

The NASDAQ futures are priced to gap up this morning after an evening of balance gave way to buying early this morning. Range and volume are both slightly elevated above normal on a session that managed to push up and test the low from last Thursday. At 8:30am Consumer Price Index data came out slightly better than expected. The number brought in a small spurt of buying that was faded.

On the economic calendar today are a slew of low/medium impact events. At 9:15am we hear the Industrial/Manufacturing Production read. At 10am NAHB Housing Market Index, and at 4pm the Net Long-term TIC Flows. Keep in mind we also have FOMC minutes out tomorrow afternoon.

Yesterday we printed a trend day up. The session started flat and the early attempts of sellers to press lower were defended. Before lunchtime buyers were in control and they continued initiating higher prices through the close.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4561.75. Look for responsive buyer just below at 4557.25 who work to take out overnight high 4585.75 but achieve little more as the market enters a wait and see grind ahead of tomorrow FOMC minutes.

Hypo 2 buyers gap and go. Take out overnight high 4585.75 early and press up to target the HVN at 4603.75 before two way trade ensues north of the overnight high.

Hypo 3 sellers become aggressive. After closing the gap down to 4561.75 they set their sights on overnight low 4552. Below here are single prints which price accelerates into, pressing the market down to 4517.25 before two way trade ensues.

Levels, note-the gods are testing me this week. Yesterday market profile was broken, today Multicharts is broken. I cannot make this stuff up:

 11172015_NQ_MP

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Updated Fire Levels

Thanks to the rapid response team at Fin-alg, I have my market profile chart back up and running.  Here are levels I am working on the /NQ:

11162015_NQ_MP

Note the nearby magnet up above.  If buyers managed to take out IB high, that is the logical target.

My primary expectation here is they lose their footing, give up open print 4493, and we go target the 4471 zone.

 

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Skating on Thin Ice

Price is set to open gap down on the NASDAQ this Friday after a globex session that featured normal range and volume. Price managed to press beyond the low set Thursday early yesterday evening before coming into balance. Around 6am a wave of selling pushed another small leg lower. Responsive buyers showed up right around the open gap left behind on 08/17 at 4564.75. At 8:30am Advance Retail Sales data came out weaker-than-expected and the initial reaction is buying.

The only other economic event we hear today is the Primary reading of University of Michigan Confidence at 10am. I have seen the primary read turn the market in the past, especially during elevated volatility, so be aware of this number today.

Yesterday we printed a second consecutive neutral extreme down day. It was the third gap down open on the week and buyers quickly stepped up to buy it. Price managed to close the overnight gap before sellers defended the Wednesday range and formed a sharp excess high. From here they continued working through the entire range to break IB low and push us neutral. The selling continued right up to the bell giving us a close on the low and neutral extreme classification.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the overnight gap up to 4586.25. Look for responsive sellers up at 4587.75 who work to target overnight low 4564. Look for sellers to target the Amazon, Alphabet, Microsoft (AAM) gap down at 4552 before responsive buyers come in and two way trade ensues.

Hypo 2 buyers strong. Close overnight gap up to 4586.25 then take out overnight high 4590.50. Sustain trade above this level and then another leg higher to test the 4600 century mark. After some churn, buyers continue pressing and work up the thin profile to target VAL 4623.25.

Hypo 3 thin ice breaks. Sellers gap and go, take out overnight low 4564 and close the 4552 AAM gap early. Trade sustains below this level setting up a liquidation. Stretch target is the composite high volume node at 4530.

Levels:

11132015_NQ_VP

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Veterans Day Futures Forecast

Futures are priced for a gap up into Wednesday over at the NASDAQ 100 after an overnight session featuring normal range and volume. Price spent most of the session drifting higher and managed to take out the Tuesday high and continue up through the Monday midpoint before stalling out on the top-end of current value. At 7am MBA Mortgage Applications came out slightly lower than expected, there was a muted response.

There are no other economic events scheduled for today.

Yesterday we printed a normal variation up day. Price opened gap down and made a liquidation thrust lower that responsive buyers quickly gobbled up. One more attempt lower was made just before 10:30am which managed to print an excess low. After setting the low we grinded sideways above the mid before one last sell program tested for interest below the mid. It was faded and we rallied into the close.

Heading into today my primary expectation is for sellers to work into the overnight inventory but to stall before closing the overnight gap. Look for responsive buyers to defend 4648.75 and make a move to take out overnight high 4661.75. Just above here look for responsive selling and two-way trade to ensue.

Hypo 2 sellers push a full gap fill down to 4643 before two way trade ensues. Look for sellers to keep price below overnight high 4661.75 and to make a move to take out overnight low 4636.25. Look for signs of responsive buying around 4622.75 and two way trade ensues.

Hypo 3 is a pole climb. Up above overnight high 4661.75 is a thin profile structure. If buyers make a strong push above overnight high, then it is likely to continue all the way up to 4683.50 before finding responsive sellers.

Levels:

11112015_NQ_VP

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Speed Zones Above and Below

Prices over at the NASDADQ exchange are down near the Monday low after an overnight session that featured an elevated range on normal volume. The price action was nearly contained within the lower half of the range established Monday.

The economic calendar is slow today. We have Wholesale Inventories at 10am.

Yesterday we printed what can be best described as a double distribution trend day down. The week started with a gap down. A tight compression formed off the open which broke to the downside and triggered a fast, liquidation move lower. By lunchtime responsive buyers stepped in, and after about 3 hours of balance near the lows we saw a late-day rally.

Heading into today my primary expectation is for buyers to work into the overnight inventory and push price up. Look for buyers to stall out before the open gap up at 4652.25. Look for responsive sellers (responsive relative to the open, initiative relative to yesterday close) around 4645.50 who target the overnight low 4624.50. Below here price action is thin. Look for buyers around the 4600 mark then two way trade ensues.

Hypo 2 buyers push into the overnight inventory and close the gap up to 4652.25 before sellers step in and work price down through overnight low 4624.50. A test below ONL/Monday low 4622 reveals responsive buyers and two way trade ensues south of 4655.

Hypo 3 strong buying closes overnight gap 4652.25 then sets its sights on overnight high 4662.25. Trade is sustained above ONH 4652.25 setting up a pole climb up to 4692 before two-way trade ensues.

Levels:

11102015_NQ_VP

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This Gap Down Is Bullish

NASDAQ futures are priced to start the week out with price gap down. The overnight session featured slightly elevated range on normal volume. Price managed to push above the Friday high and sustain trade above it for long enough to form a weak high. Then around midnight sellers stepped in and worked price back down to the Friday mid.

The economic calendar is light this week as we wrap up earnings season. At 10am we have Labor Market Conditions Index Change and at 12pm MBA Mortgage Foreclosures.

Last week started with a trend day up which saw follow through Tuesday. On Wednesday price opened gap up, went to new contract high briefly (failed auction) before reversing. The rest of the week was a churn with slight downward pressure as sellers emerged.

Friday morning price accelerated to the downside but quickly reversed forming an excess low. Then late in the afternoon a small rally took hold into the weekend.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4702.50. From there look for buyers to set their target on the (weak) overnight high 4712.75. Look for responsive sellers just above overnight high and two way trade to ensue north of 4692.

Hypo 2 buyers have a hard time closing the overnight gap and instead stall out around 4700. Price heads down and takes out overnight low 4683.50. Look for responsive buyers just below around 4681.50 then two way trade to ensue which eventually closes the gap up to 4702.50.

Hypo 3 once buyers take out overnight high 4712.75 they set their sights on a pole climb to test above last Thursday high 4726.50. Look for buyers to press for new contract high then look for responsive sellers at measured move levels 4732 then 4734.50.

Hypo 4 sellers gap-and-go down, take out overnight low 4683.50 early and sustain trade below 4680 setting up a liquidation down to test below Friday low 4658.75. Look for responsive sellers down at 4656.50.

Levels:

11092015_NQ_VP

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Liquidation Scenario on The Table

NASDAQ futures are heading lower as we approach cash open. The overnight session features elevated range and volume. Action was balanced with an upward skew until a robust Nonfarm payroll report was released at 8:30am. Price was contained mostly to the lower half of Thursday range before briefly exceeding the session low.

Also on the docket today we have the Baker Hughes rig count at 1pm and Consumer Credit at 3pm.

Yesterday we printed a normal variation down. We opened gap up, went down and closed the gap and found buyers who were then overrun by a big wave of selling. The action pushed range extension down briefly before rallying back to the midpoint. From there sellers were seen defending before we ultimately came into balance.

Heading into today my primary expectation is for sellers to push down though overnight low 4672.50 to set up liquidation down to 4656.50. From there look for two way trade to ensues.

Hypo 2 buyers pus into the overnight inventory and close the gap up to 4696.50 before sellers come in and work down through overnight low 4672.50. Buyers are found not far below and two way trade ensues.

Hypo 3 buyers are strong, press the gap closed then set targets on overnight high 4708.75 before balancing into Friday grind-balance trade.

Levels:

11062015_NQ_VP

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Envisioning Neutrality

NASDAQ futures are up a touch heading into Thursday trade. The overnight session featured a normal range and volume on price action that was contained inside the prior day range. Price was churning around the Wednesday MID before pressing higher around the time European markets opened. At 8:30am Initial/Continuing jobless claims came in worse than expected, a high read, and the initial reaction is mute.

The economic calendar is otherwise quiet. Energy traders are likely paying close attention to the 10:30am Natural Gas storage read since unseasonably warm weather has gripped the Midwest.

Yesterday we printed a normal variation down. Price opened gap up and quickly went down to close the opening. Initially buyers were responsive at this level but were overrun later in the morning as sellers pressed down into the volume pocket. Just on the other side, and right at our prior value, responsive buyers again emerged and price closed out near the mid.

Heading into today my primary expectation (blue) is for sellers to push down into the overnight inventory and close the gap down to 4710. From there look for price to continue a bit lower but find responsive buyers ahead of overnight low 4700.25. Then two way trade ensues with buyers working at taking out overnight high 4727.50. Stretch targets are 4732 and 4734.50.

Hypo 2 (orange) sellers push down through overnight low 4700.25 and explore the lower region of our current value. Look for responsive buyers to defend north of 4695 and two way trade to ensue around the 4710 mark.

Hypo 3 (green) buyers push off the open, take out overnight high 4727.50 early on and go test up to 4732 before finding sellers and two way trade ensues around 4720.

Hypo 4 we break balance up. Buyers are strong, sustain trade above 4734.50 setting up another leg higher and continued exploration of higher prices.

Hypo 5 break balance down, sellers break back into the lower value area and go test VAL at 4684.75.

Levels:

11052015_NQ_VP_final

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See The Order in Market Behavior Yourself

The best resource for learning market profile is your own live application.  Just draw the profiles.  Then watch the profiles form, and how price behaves near value and pockets and the formations you see.

After a while it becomes clear.  The detection of ‘change events’  where you make your splits becomes intuitive, and all the sudden you have FIRE LEVELS.

I love when a solid structure takes shape.  Our current formation looked much different this morning.  But what stayed the same, our rock, was the value I split out below.  It starts at 11:30am yesterday (when we left the prior balance, or changed) and includes all the overnight session (which I manually smooshed in) and all of the Wednesday session.  Check it out, with the right splits the key levels and value are clear:

11042015_NQ_VP_final

Today ended with price right in the middle of value.  We are likely to chill inside here until Friday morning’s Nonfarm payroll data.

See that sweet excess low right off of prior value?  Textbook excess low.  What is an excess low?  One of these labels we use as humans in an attempt to describe and categorize an observation.

You do not need learning material, or at least not much.  Even in Mind Over Markets the writer is all like, “These are just-sorta-like guidelines but auctions are evolving animals.”  As intelligent lifeforms of course we go all Aristotelian with categories and labels, but just do market profile by yourself if you want to learn.

If you really want to hear me talk about them for 5 hours, I did do a series a while back inside After Hours.  Some of my tactics have changed slightly since then, but I laid down my knowledge as best I could.

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