Where the bullish momentum in US equity was from when the open looks quite bearish?
because the bearish structure being broken in both NQ and ES.
Therefore never be deceived by some temporary weakness. Wait until the structures being broken to the upside.

hi
what is your bias for the CAC and EU market this morning ?
I am more inclined to expect this has been a double top and now we are going to check previous low.

Not so sure, though.

Sorry for the late reply. I was struggling with my morning routine the past few days due to lack of sleep.
The last couple of days are very interesting from market profile point of view.

You can see that from 12th on, Cac was doing the pattern of balance for a day and the next day open outside of the value, then trading through the whole value area. It is a classical pattern of broadening triangle formation that the intention is to shake people out of position.
Yesterday was a whipsawing day, and we have openning within the value. Hence today is very like to be a balance day, which means aiming at prior day's VAH/VAL as target.


The daily TPO/VP charts might be quite confusing. But if we take a look at the monthly volume profile, we can see clearly that the cac has been trading within a well defined value area since the beginning of the November. There were two failed test at 5150. But after the failed break out, the break downs below 5050 are bought back by the market maker. Therefore I am suspecting that the market maker has the intention to bring the price higher. But if they failed to defend the 5050, then there will be a big break down towards 4850.

guidoisot 

hi what is your bias for the CAC and EU market this morning ? I am more inclined to expect this has been a double top and now we are going to check previous low. Not so sure, though.

The weekly VP chart in both DAX and CAC are showing a bearish bias that the value has topped out last week and it is migrating lower.

shrekchenbin 

Sorry for the late reply. I was struggling with my morning routine the past few days due to lack of sleep. The last couple of days are very interesting from market profile point of view.

Thanks for sharing your great market profile analyses.
Chop for the last 2 days on main EU indexes!
only the bund seems to anticipate a move up.
Maybe today’s retail sales (below expectations for the last two months) will act as a catalyst and set the direction out of this chop.

How to make sense of the price action this morning in CAC?

Out of the open, it poked head out of a TPO anomaly and smashed down hard. What is the destination on the other end?
The prior day's value area low at 5051. Once it trades below, the bears are motivated to seek the down side extension. You see that the bears were trying very hard to defend that level capping price below the VAL.
It seems that the bearish follow through can not materialize as there is very little participation at this moment.
Now i am monitoring the price to see whether it is able to trade back above 5050. Once that is done, the price can snap back above 5080.

Due to yesterday's strong reversal in US equities, the European equities were able to crawl back above the broken major support. As of speaking now, both DAX and CAC are trading within yesterday's value. Hence the inside day trading rule applies, which means that we would wait until one side of the prior day's value being taken out before taking position.

To be honest, I have strong urges to drop some shorts to see what would happen. However, I have promised self that I would be prudent and respect the trading rules. I am going to hold off my urge for now and wait patiently for the cash open.

At this moment, cac is trading just above the value low of this week's VP. By looking at the CAC chart, yesterday's down leg felt to me like a failed break down as price was able to retrace the second leg and trade back into the value after such a deep break down. Today's bear invalidation line is at 5090, the initiation point of yesterday's down leg, which coincides with the weekly VP value high.

The initial focus of the London session is at the top formed around 5055 level. If that one is taken out, then Cac is going to trade above the prior day value high, hence being preliminary bullish and we shift our focus to the weekly value high. If that assault failed, then we would see it trade all the way through the whole value area to the low.

It feels like the NQ is form a preliminary top just below weekly value high. It would be bearish if the 6855 level were taken out, then the crown top formation is confirmed, we are likely to see it trade back towards the weekly value low at 6800.

At this moment, we have a break out in a contracting triangle.

Due to the rollover in Cac, there are some mismatch in the value area lines.
The value area high should be at 5048.
Now, a neckline has been formed at 5048, which means clear effort is put in by the insiders to defend that level. Once that level is given away, then the value area trading rule applies (see you at the other end of the value).
It is interesting that the cac is so much more technical than dax.

shrekchenbin 

Due to yesterday's strong reversal in US equities, the European equities were able to crawl back above the broken major support. As of speaking now, both DAX and CAC are trading within yesterday's value. Hence the inside day trading rule applies, which means that we would wait until one side of the prior day's value being taken out before taking position.

Here is the chart.

shrekchenbin 

Due to the rollover in Cac, there are some mismatch in the value area lines. The value area high should be at 5048. Now, a neckline has been formed at 5048, which means clear effort is put in by the insiders to defend that level. Once that level is given away, then the value area trading rule applies (see you at the other end of the value). It is interesting that the cac is so much more technical than dax.