Let's take a look at how the reference areas worked out today...
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The upper limit of the bracket is 1362.75-1363.25 and the lower limit of the bracket is 1352.50-1353.25. The high volume node is 1358.50, which is near the middle of the distribution. I am expecting the bracket limit(s) to be tested tomorrow. If a bracket limit is faded (i.e., a responsive trade), the target will be the high volume node (or middle of the distribution). |
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The ES opened and traded down to the high volume node of the 3-day composite and reversed on weak market internals, which formed Tick and volume divergences. The ES then traded to the upper bracket limit at 1363.25 where a responsive trade could have been taken with the middle of the distribution as the target. (It's amazing how often these Market Profile S/R levels get hit to the tick.) As the ES traded to the middle of the bracket, internal divergences formed again. Towards the end of the day, the upper limit was tested again. See the chart below for an illustration of the day's action. Note that the ES is now in a 4-day trading range and the key reference areas for today will also apply tomorrow, 10/11. See the second chart for an updated composite profile.