1) Long and intermediate trends: market remains in an uptrend and is developing a value area higher. For more details please see Monday’s prep.
2) Short term trend: Price is imbalanced lower relative to the developing value area with balance between 1391 and 1399 and fairest price at 1393. Price has already rotated up and hit the 127.2% and 161.8% extensions on the upside and the -27.2% extension on the downside. Here are my trading levels for today:
ES short term trend May 4 (click to enlarge)
3) Market Profile: market created a triple distribution day yesterday following a double distribution the day before. The prior balanced area with VAL at 1381.75 is a reference area to the downside. Look for yesterday’s poor highs as reference for continuation to the upside. As of 6am ET the overnight inventory is balanced while slightly short.
ES market profile May 4
Scenarios for today:
- The 1378-81 level are good areas to find responsive buyers with a target at the VPOC at 1393 and stop below 1377. If the market opens lower we could see a sharp movement in this area before bouncing back up so execution will be key
- The 1404.75-07 and 1409-11 may find responsive sellers with a target back to the 1401 level. If price gets to those areas today it will likely reside there for a substantial amount of time before participants realize it can’t find enough buyers to push it higher
Today’s scheduled events:
- 8:30am - Non-Farm Employment Change
- 8:30am - Unemployment Rate
- 8:30am - Average Hourly Earnings m/m
- 11:25am - FOMC Member Williams Speaks
