How I made 7.75 points in the emini S&P 500 today

Hopefully these extracts from our Live Room will serve to show the value of Market Profile not just as a tool for identifying the current market state, but also the price levels at which break-outs are likely to occur, and even price levels that any subsequent directional move is likely to move to. Further details of our Live Room can be found at the bottom of this page.

The chat transcripts are time stamped with GMT which is 5 hours ahead of EST. 14:30 GMT = 09:30 EST.

13:58 @Rick M: good morning
14:05 @Sam: ok let’s take a look at how we’re shaping up this morning in the ES

14:11 @Sam: so we have a globex range of 1346 – 1351.75
14:12 @Sam: currently trading around the middle of that range
14:14 @Sam: obviously today we’re following friday’s huge day up, which saw us break back through the important 1350 level, and close near its high of 1353.25

14:18 @Sam: i’ve marked the profile chart up there with arrows pointing to today’s globex high & low – and how they both coincide with HVNs (high volume nodes) from friday’s session
14:18 @Sam: along with Friday’s high @ 1353.25
14:19 @Sam: In terms of trade ideas for the morning ahead
14:19 @Sam: it’s quite usual for a rotational/sideways type of day to follow a large trending day such as we had on Friday
14:20 @Sam: and we are certainly seeing evidence of that so far, in the globex session at least, with clearly defined high & low, and a gaussian type profile
14:23 @Sam: I would suggest looking at the price & volume action when we get to either the globex high & friday high area of 1351.75 – 1353.25
14:23 @Sam: or if we get to the globex low of 1346
14:24 @Sam: those are the two key price levels as we head into the open
14:25 @Sam: I’d like to see whether the market has any aggressive buying left in it at the globex & friday high

14:29 @Sam: there’s a weekly ES profile – which shows us there is a good sized HVN up around 1358
14:31 @Sam: so to reitterate – trade idea is to wait for the market to trade at either the globex high (upto Friday high) and low, then take a look at the price & volume action there to determine what to do in terms of entry
14:31 @Sam: we’re open
14:31 @Sam: let’s see what plays out

14:31 @Rick M: 1.27 globex levels
14:32 @Sam: interesting, that 1.27 globex comes in right at Friday’s high print
14:32 @Rick M: when we have a narrow globex range it is common for the 1.27 fibs to be exceeded
14:50 @Sam: ok so the ES is testing our globex low right now of 1346
14:51 @Sam: so far the volume is fairly light, and not much urgency to drive price lower
14:53 @Sam: points towards a ‘fake out’ rather than a ‘break out’
14:54 @Sam: a ‘fake out’ is when a market exceeds a key price level before reversing back the way it came

14:55 @Rick M: I prefer to see a divergence at the fib
14:55 @Sam: wait until you see how that 1.27 fib lines up with an HVN on this chart, Rick…

14:57 @Sam: I’m trying a long from here @ 1344.25
14:57 @Sam: on the basis that I expect the ~44 HVN level to hold up as support, and at least provide a bounce


15:32 @Sam: chart update
15:32 @Sam: showing how our reversal pattern @ the ~44 HVN played out
15:33 @Sam: i’m scaling half of my long off here @ 1347.50
15:33 @Rick M: very nice, sam

15:35 @Sam: there’s a delta footprint chart which also shows the reversal taking place in the form of a divergence as we moved to new lows
15:36 @Sam: doesn’t matter whether you use a simple 5 min chart, or a footprint chart, a DOM, or your indicators of preference
15:37 @Sam: the important thing is to get really good at reading the early signs of a reversal at the key price levels

15:38 @Sam: and an updated profile for the ES
15:42 @Sam: the plan for the other half of my long is to hold for a test of the globex high
15:42 @Sam: easier said than done – the temptation to close out a decent profit is often hard to resist

16:16 @Rick M: note how mid range provided support in the same area as friday’s most heavily traded area
16:18 @Sam: good timing rick
16:18 @Sam: this is where I intended to close out the other half of my long
16:19 @Sam: I have a strong feeling we’re going to test Friday’s high up at 1353.25
16:19 @Sam: but got to draw the line somewhere, so I’m flat here at the globex high
16:19 @Sam: all out at 1352

16:22 @Rick M: 1352 also corresponds with the upper keltner
16:22 @Rick M: not the 3x trend setup on the 129600
16:23 @Sam: yes that’s a lovely 3x setup which coincides with the ~44 HVN level we highlighted earlier
16:23 @Sam: and a great example of how the 9/30 & 3x setups work well in conjunction with the Market Profiling techniques on show here today

16:33 @Sam: that’s how the ES profile looks now

20:09 @Rick M: triangulation
20:45 @Sam: pretty much a ‘balancing’ day in the ES
20:45 @Sam: consolidating Friday’s gains
20:51 @Rick M: the ol’ contraction after expansion
20:52 @Rick M: see you tomorrow!

21:14 @Sam: final profile of the day
21:14 @Sam: as expected before the open – this was a balancing day following Friday’s big directional move higher