ES Trading For 9/17 + Rest of Week

[OAC]

Dogpile,
Ant had a composite profile up couple days ago and this is an area
we are breaking out of. I noticed that the shape is more like a p.
I know that p-shape means short-covering in a daily profile.
But I am just wondering whether the shape of a composite profile
has any meaning ? Just want your opinion.

[OAC]

The other possibility is the shape of composite profile do have meaning,
but the shapes and interpretations of them are different from the daily profile.
Just a thought

[Dogpile]

OAC,

I think the composite profile stuff is good to keep in mind but I am focused on just the recent auctions for actual trading.

it should be pointed out though that a 'P' is not a bearish profile, whether it is composite or individual day. It is not a strongly bullish profile either --- but it is consistent with how the market goes up a lot of the time. It pushes up and runs out of gas as some sellers come in, it pushes up again and sellers come in -- it does this for a multiple days as it marches up --- then it flushes down for a day or two to rinse out some of the longs and then it reverses (often in a 'b' daily profile), bottoms and churns up again. In terms of trading, I think the telling action is the action of the current auction.

markets maybe go up very quickly (like yesterday) or it may creep up. generally though, markets go DOWN quickly --- so a 'b' profile -- which indicates lack of seller conviction actually has bullish implications. I haven't found the 'P' to be all that useful for trading. Definitely look hard at b's though. Note, we had a b-like profile on Monday -- indicating lack of conviction at lower prices and potential for reversal. One of my set-ups in fact is to look for a 'b profile with an afternoon higher low' actually -- this may often resemble an inverse head & shoulders sometimes too. I have found this to be a very good profile set-up. That was actually the reason for the 'higher low' line I drew on that days summary in this thread. Can see it here:

http://www.traderslaboratory.com/for...ep-17-2007.png

Markets tend to go down fast and hard when they want to go down -- the market may coil in the middle of the day and then break down hard in the afternoon -- but the afternoon higher low often completes a downside auction, IMO.

[Dogpile]

Very unusual amount of volume at 1 particular price today.

Generally 40-60k contracts traded at one price represents the peak for the day. today, we already have > 100k contracts traded at 1546.00 and its only noon EST.

Note that PVP=VWAP=Last price, we are in perfect balance as I write this.

We have an 'excess low' below - the unfilled opening gap. We have an 'excess high' above -- the selling tail. So this makes for tough structure.

A break up might lead to a 'lower high' -- under a selling tail. A lower high UNDER a selling tail would be bearish -- but might not play out until very late in day or overnight. Also watch for Head & Shoulder top --- but these usually don't play out until very late so be careful.

The profile does not suggest continuation at this point. We have a 'fat profile' (very, very fat) and a selling tail above. However, we are building higher value so this is just not bearish.... net net, this is just a conflicted structure.

The main point was just to post how unusual this volume distribution is --- extremely high volume at a single price so early in the day.

First Thumbnail is the distribution at 10:36am EST
Second Thumbnail is the distribution at 12:08pm EST

[ant]

I am definitely alert of the high volume area around 1546. Thanks.

Here's my read of the market thus far... The day started with the buyers in control. As Dalton explained in MoM (pgs. 102-105), after the E period traded below the D period, that was a signal of a "potential" timeframe transition. When F period printed double EF TPOs below the D period, that confirmed seller control. So it looks like buyers relinguished control to sellers.

As you stated, we are building higher value which seems to indicate that the longer timeframe is keeping value higher (since the trend is up and it's the higher timeframes that starts trends/breakouts), but the day timeframe is trying to sell the market. Dalton also mentioned that when there is conflicting information, that may be caused by conflicting information from two different timeframes.

If the buying tail below is retraced, there is a high volume area around 1540 in the composite profile.

[ant]

Day structure in the ES is a Neutral Day, with trading on both sides of the Initial Balance. I'm hoping to get a trade opportunity to go long for a play towards today's high volume area around 1546, which Dogpile pointed out. Looking for a potential long around 1540. Let's see what happens...

[Dogpile]

we coiled/balanced and broke lower. would expect the higher timeframe to run this back up and then for a lower high to eventually be put in... that said, the extremely fat volume at 1546 is weird and not sure what to think of that.

[Dogpile]

Well, after a long slow slide down -- higher timeframe buyers did come back and push the market back up to just tick the 1546.00 level one more time.

The action at 1546.00 today was pretty bizarre. Maybe its something option related but the market traded a 'sh_tload' in the 2-pt range of 44.75 to 46.75.

Thus, as outlined previously, there are a lot of players who watched the S&P's go up and then entered at marked-up prices. The profile was very fat and we have a selling tail over 1546.00. On the plus side, we built higher value.

But we ended up closing below VWAP. A gap down would mean we will begin building lower value. This could start a 'down auction' that could feed on itself as weak-longs stuck at bad prices get tested and many capitulate. This idea is consistent with a Taylor Sell-short day that has lined up for tomorrow.

That said, there could also be enough residual momentum to keep the market afloat. We will just have to see.

[ant]

Attached is the composite profile I referred to in my previous post in case you're interested in seeing it. I monitor the high and low volume areas, not individual prices.

[ant]

Dogpile, I really like your charts and annotations. Where did you get the 'TVOL Comparison' indicator?

Another question, in your chart above, you show a bear flag, did you trade that bear flag because price was below VWAP or do you look at the wave structure in the 2min chart to set your bias? I'm assuming that your bias may change throughout the day. Is that correct? Thanks.