London session market profile preps and journal for DAX

Hi,

Great thread, we're spoiled for choice on here for good Market profile traders, here's another from your part of the world doing well;

https://www.forexfactory.com/showthread.php?t=617762

D

Dane,
Thanks for that thread. I am fully aware that one.
Dutchy Daxy is indeed a very experienced MP trader.
Bin

Closing bell comment,

ES has gone into long liquidation mode again.
Out of the open, we had a open test and drive which auctioned against the overnight first before taking out to the high.
It had one time framing higher for the most of the session up to 2:00 EST. But the investors have no willingness to take overnight risks fearing any unpredictable Trump tweets might completely wipe out their portfolio. As a result, the last two hours of trading were dominated by long liquidation which takes market from the prior day's VAH back down to the VAL completing a wide rotation inside day.

What does it tell me?
It is telling me that the market is dominated by the short term money alone that there is no higher time frame buyer was buying into today's market. The short term traders are usually the weakest hands as they are ready to fold their hands when they see adverse market circumstance and they don't take overnight risks. A market that is dominated by short term money is bounded to be a rotational market not a trending market.

Yesterday I was not able to trade because Monday is my papa day. By looking at yesterday's profile, the market looks quite bullish.

There was a long liquidation break during the lunch time, but see where it pulled back to?
Cac has bounced off from the prior day's VPOC and found bottom precisely at the value area low. It speaks strength to me.

This morning we have a bullish open above yesterday's range and value. In this case, I would like to see the at least the value area high to be tested during the morning session to fill the gap. If the gap is not able to close, then just go with the gap.

Hence the plan is to look for gap fill trade first and seek long entry at VAH and subsequently POC.
Some key levels for DAX:
VAH = 12332.5
a high volume node = 12318
TPO = 12280

Long liquidation on the way.
The short term inventory was too long. An inventory adjustment is needed before the market could rally.

Yesterday was a day of balance. What usually comes after the balance is range expansion.
At this moment, i still cannot say for sure which way it is going to go, but the odds are stacking on the bulls.
The reasons are two folds:
1. US equity has shown sign of strength after breaking out of a down wedge.
2. DAX has fully auctioned the area below 12500 and built a low of value there since Feb (see the yearly profile chart).

However, we should not rule out the possibility that DAX would turn around to fill a couple of the TPO holes left by last week's trading before it takes off.

At this moment, DAX is poised to open within the value with a slight bearish tilt. I am not going to press either scenarios, bullish break out or gap fill, until it trades outside of the prior day's value.

Some key levels:
VAH = 12407.5
VAL = 12371.5
POC = 123991
VPOC = 12383

The odds for long liquidation and gap fill scenario is higher now after the rejection at 395.

Such a slow day.
The long liquidation is finally on the way.
Was able to trade an easy setup in CAC.

Another slow day.
The market maker is on holiday, I think.

Check out where the long liquidation was targeted by the algo?
Yesterday's low and daily S1.

The slowness must be due to the London school holiday.

After yesterday's long liquidation, those impatient longs are washed out and, actually, there is no damage being done.
DAX has traded back into the balance of last Friday. Why the last Friday's balance is so important?
Because that is where the biggest concentration of the volume for the last two weeks, which is saying the big hand traders have built their long inventory in that area. Hence I would expect them to defend that area the first time DAX trades there.
But we should bear in mind that once that level being taken out, a much bigger long liquidation is going to be triggered. In that case, the DAX is very likely to drop down hard to fill the gap between 12137.5 and 12100.
So the two week's VPOC is setting up the up bullish and down bearish scenario for us that i would monitor the price action closely when DAX trade into that level.

A couple of key levels to watch:
two week VPOC = 12245
yesterday's VPOC = 12305

A potential Wolfe wave short setup in DAX is setting up.
I am looking at an entry at or higher than 12315.

Morning debriefing

This morning, DAX has traded within a well defined box that it has provided many range trading opportunities. It started the session with a drive to the upside and failure. It has turned around and found support at 75. This range has remained in place until 12:20 and sudden spike has broken it decisively. The cause of the such spike is most probably the cheaper Euro. The Euro slumped hard during the morning session, but it was never reflected in the DAX price. I think it is likely that some big trader from London was pressing the market down via brute force until the morning session ran out of time that he would have to liquidate his position before the lunch break. That was merely my hypothesis. But if you look back there are plenty of spike around 12:20 CET time in DAX that I can not help to make the link to the London lunch break.

After that spike high, DAX has stood firm above yesterday's VAH which is bullish. After building a bit value and acceptance in the upper distribution, we are likely to see price advance from here to challenge the Tuesday high sometime today or tomorrow.

Yesterday was a trend day. The profile was a elongated one with multiple distributions.
In yesterday's mid-day briefing I have said that the market is consolidating above prior day's value, it is likely to challenge the Tuesday high some time later this week. But the target was achieved very quickly after the NY session starts.

After that target being achieved, there is no more upside target i am going to tune back down my bullish bias that the most possible scenario for me is to consolidate to build energy for the next assault to the upside.

By looking at the daily chart, it seems that the DAX has broken out of a big fallen wedge and it might be ready to smash some major resistances.
There are two major resistance levels in daily chart, one at 12480 and the other one at 12600. Are we going to challenge these two levels today. It is possible. But I don't think it is very likely. Because yesterday's drive has spent quite some energy and there are plenty of poor structures in chart that needs a repair.

The scenario that I am looking at is a range consolidation market with a slight bearish tilt for the London session and then attempt to break out in NY session together with the US equities. The levels that I am looking to build some positions are
-- the 12400 high volume node
-- 12380 TPO hole

Stopping precisely at the prior high?
It is very likely a bear trap when market stops at a mechanical level to the tick.

The weak longs are stopped out and sheep get slaughtered.
The Market maker has the liquidity pool at 12500 in his mind.

A reaction can be expected at the volume cluster around 12470.

long orders are drying up.
wonder when the opposite orders are coming in , I could be very wrong as usual but that was dreadfully slow run up.

Selling tail appeared.
This could mark the end of the bullish auction just before the lunch break.

I agree with you.
There is no intention for the market to auction much higher from here, because, like you have pointed out, there is simply not enough volume to push the market much higher. The market maker can only do some upthrusts and stop run at the edge of the ranges, and that's it. I am looking to take some short scalps.