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Tag Archives: $NQ_F

Precarious Potential Opening Position

The futures drifted lower last night, after some selling took hold late into yesterday’s afternoon session.  The action was balanced, and featured a proper auctioning of price before finally determining a drift lower was in order.

The move pressed us down into the single TPO prints from yesterday which means we are opening in range/out of value verses yesterday’s trade which elevates the risk/reward for today’s session.  I have a rule that will not let me trade inside of single prints unless I am going with the short term trend, which in this case is down.

I have drawn a potential scenario for today, where I expect us to run the zipper down and test the value area high at 3670.50.  Should this occur, we may see a balance ensue.  If we continue lower without responsive buying, our next levels are the VPOC and eventually the value area low at 3662.75.  These observations can be seen on the following NASDAQ market profile chart:


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Morning NASDAQ Trader Report

There has been solid overall auction activity overnight where we are seeing constructive action from both the buyer and the seller.  Late into trading Friday the sellers rejected the uppermost distribution we were forming.  Their action could be seen as a swift vertical movement lower followed by an hour of “acceptance” of the new prices via sustaining the levels.  Once the futures opened back up for business, we gave the area a solid auction lower, found a bid, and pressed above where we are currently finding selling.  The net activity forms a nearly symmetrical distribution of time and volume.

The profile however, does appear to have a slight imbalance which sellers could capitalize on early this morning.  It appears to be contingent upon how we handle 3674.50 early on, a value area low and sight of prior responsive selling.  If we again find sellers here in the early USA hours, we may see an attempt to balance out our current profile by trading down below the volume shelf at 3664.25.

Of course, if sellers are unable to respond at 3674.50, then we may see another drive for fresh highs.  Also, if sellers cannot push us over the volume shelf to balance out our current profile, then we would gain a valuable bit of insight, that buying force is great enough to disrupt the natural tendency of Gaussian distribution.

In the short term, I give sellers a slight edge in control.  This is void if they do not show responsive trading at 3674.50.  This short term control by sellers firms up if they push us below the shelf at 3674.50.

Intermediate term, we are in balance.  I have highlighted this balance and a few key levels on the following micro composite profile, spanning about 6.5 days of trading activity:


Long term, buyers are in control.  This can be seen as a series of higher highs and lows on the daily and weekly COMPQ chart.

Below is my vision for the morning, where I have highlighted the key price point and a scenario for the session using my market profile chart:


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Approaching The Slip Zone

We have been profiling sellers all week in the futures, sellers who have been especially active during the globex session.  It made sense to have an expectation for selling given the rapid ascent of the NASDAQ index and the unfinished auction business it left behind in its wake.

We have been observing a very balanced profile with a naked VPOC just below our recent trading activity.  It was a logical target for sellers and the auction process.  A throwback to the pricing allows the marketplace to assess the force that originally existed at these prices to determine if demand still exceeds supply forces.

When the news hit the wires about Facebook and purchasing What’s App we saw a quick move lower in the after hour session.  Since then, it has been a back-and-forth rotation with sellers in control of the short term timeframe.

I do not have a clear read on the intermediate term control.  I am attempting to see balance on the intermediate term, but I do not see it.  I see sellers somewhat having an edge, but only if they can press lower through today.  We are set to open near the slip zone, a set of single print TPOs from a very dynamic move higher.

Between us and the slip zone is the very low volume node at 3635.  Should this level breach, I will be looking for weakness to cut out of my book.

I have highlighted this level and a few other observations on the following market profile chart:



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Drifting Above Naked Prints

The equity futures experienced a slight drift lower overnight, as the globex timeframe continues to show a slight edge to the sellers this week.  Sellers put in a lower high overnight on the NASDAQ composite at 3678.50 which is the VPOC from yesterday’s short squeeze profile.

This lends a bit of support to the idea that the buyer strength we experienced yesterday may have been a temporary force, and sellers may assert themselves again today.  The short squeeze profile, or P-shape profile is much more pungent and actionable when printed during an uptrend.  It usually occurs at or near the end of a thrust higher before the marketplace resumes its downward trend.  Today, we are trending higher, thus it reduces the significance of the print slightly.

The prices below have seen thorough auction, but I still think price tests lower to verify if buyers still have the same level of conviction below.  Today is the third day I will highlight the naked VPOC we printed on 02/13 at 3651.  These tend to get cleared up (tested) eventually, even if we are to continue higher.  I also continue to highlight the VERY low volume node at 3635.25.   If this level is breached, we may see rapid acceleration downward, liquidation-type trading.

I have highlighted these levels, and a few other observations on the following market profile chart:


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Sellers Presenting Themselves

The NASDAQ futures went for a bit of a ride, trading 18.5 handles worth of range while we celebrate Presidents Day.  The futures were working lower this morning until eventually reaching some oversold conditions.  At this point a bit of responsive buying entered and sparked a squeeze.  This action resulted in us first breaking down from the uppermost profile distribution to now retesting that uppermost distributions value area low.

The question now becomes, do the sellers continue to assert their control of the short (overnight/day) timeframe by rejecting a move back into upper value, or do we see the intermediate term long waking up and making things a little less clear for the auction?

The long term timeframe is still nestled in the controlling hand of buyers.  Intermediate term, we continue seeing value migrate up with little in the way of a pullback.  The rally is becoming a bit aged, but one would be taking a difficult trade to attempt fading it before seeing sellers retain their early control.


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Building Value Via The Auction Process

After last Thursday’s strong trend, the market spent time coming to terms with the new index pricing by auctioning.  This process began Thursday afternoon and by Friday afternoon the consensus was to explore a bit higher for value.  Thus the intermediate term timeframe continued to press on for the buyer.

The long term timeframe is back into the steady hands of the bull camp.  This can be seen on a daily or weekly chart of the NASDAQ composite.  Overnight, prices have rotated a bit higher, in a drift of sorts.

The logical trade early on then, would be to press into that overnight inventory of longs, and see if lower prices can motivate selling/liquidation.  I have highlighted the relevant price levels that developed in a rather large and organized distribution atop our trend.  I will be keying off these levels, should they be tested, to gauge buyer confidence and response.  These levels and more can be seen below on the following market profile chart:


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The Day After A Trend Day – Valentine’s Day

The equity futures markets were balanced overnight, however rather opportunistic given the large range and impressive volumes.  The actual auction that took place overnight was very organized and saw good participation from both the buyers and sellers who both seem to be willing to participate at these levels.  This suggests we are coming into balance.

However, there was no definitive point of value reached, as the resulting volume profile suggests a slight imbalance exists via the lack of a smooth, bell-shaped curvature.  Instead the profile shows a slight imbalance to the upside.  I have highlighted this imbalance as well as a few key price points and scenarios on the following market profile chart:


Yesterday was interesting and the morning vision work paid off in spades.  Inside 12631, I was taking through the profile development.  Within the first half hour of trade my entire upside scenario had been captured by a strong opening drive. This was OTF (other time frame) action, or the long term timeframe asserting itself on the marketplace.  OTF shows no regard for support and resistance levels seen on the daily and even intermediate term profiles, instead opting to plow money into the marketplace.  It did not take long to recognize the trend day activity and grab on and ride it until the wheels come off.

The NASDAQ seemed to play catch up yesterday, however, while the S&P put in a milder trend, almost static enough to challenge the trend day structure.  I will be watching the S&P today, to see if it can show strength.  Thus far in the AM, it has been diverging from the NASDAQ.  I have highlighted this divergence on the following market profile chart of the ES future:



Also, have a Happy Valentine’s day.  Be extra gay and sappy with your special someone.  But don’t forget about the industrial production numbers at 9:15am and consumer sentiment at 9:55am.  Carry on.

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Shaking Off A Doji Print

Yesterday we printed a tight ranged doji candle on both the SPX and the COMPQ, signaling indecision on the part of buyers and sellers and a marketplace coming into value.  It now appears the markets have found supply up here which needs to be worked off.  We may begin to see the auction process return to two-timeframe action after four solid days of long timeframe dominating the action.

Futures are lower overnight, and sellers are attempting to work down into 2/10 prices on the NASDAQ.  We have many interesting levels below which we left behind during the dynamic push higher.  I have highlighted a few potential scenarios on the day, and also some key price levels on the following market profile chart:


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Morning Market Context Report

Today is day three of a week that has thus far produced a solid bit of follow through on the hammer reversal candle printed on the NASDAQ composite, see below:


Remember, that only one week ago today, the long term control of the buyer had come into question, however we maintained that the buyer still held the control.  One week ago today was the inflection point that tripped the rally:


Thus buyers remain in control of the long term auction after being put to the test last week.  Once a market finds a floor, or a lowest bit, it begins the process of finding the ceiling.  This is the discovery phase where price moves quickly in the opposite direction in search of excess that motivates selling.  We can look for a large selling wick perhaps, or even a subtle rejection of higher priced value.

On the intermediate term, we have come into balance, however the point of control is at lower prices.  Intermediate term balance dates back to January 24th.  I would produce a wonderful chart of this intermediate term balance, but my primary charting platform is two days into a massive elroi optimization.  Thus I must estimate intermediate term control VPOC to be around 3553.

Short term, buyers are in control.  This can be seen via the migration of prices higher, aggressively.  Value areas are not even overlapping yet.  This is strong market activity.  Before the sellers can regain control in the short term, they will first have to create some overlapping value.

I have sketched out a few scenarios for the day, as well as marked a few key price levels on the following 24-hour market profile chart:



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Observing The Rally With Market Profile

I have stitched together the last eight days of market profile in the /NQ_F, the electronic futures contract representing the NASDAQ 100.  Before doing so, I went through the price action and separated the profiles in to the proper distributions.  The resulting picture is an informative piece which we can use to measure future inflection points against and also analyze real time.

Given the macro nature of market activity recently, I decided to use the 24-hour profiles in this representation because I feel it shows the true auction taking place as money sloshes around the globe around the clock.

I have noted the observations I deemed significant, and the subtle shifts in sentiment leading up to the rally.  Do you see anything that interests you?  Click and enlarge this one, it is pretty huge:


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