The Cloud Trader: Morning Update for Tuesday, March 11th

Major Support/Resistance Levels- ES

Daily Outlook

Prior Day Market Sentiment: Bearish/Neutral
Overnight Inventory Change: Bearish/Neutral
Inside Day/Outside Day:Inside
Location of price relative to market profile: Near POC
Notable overnight futures markets changes:
Up: ZO (Oats), SB (Sugar), SI (Silver), KC (Coffee)
Down: ZC (Corn)

News for the day:

Wholesale Trade: 10:00a

*Red highlight means the news is a market moving event;
yellow highlight means the news merits attention

Projected ES price action for the day: Trading the S&P in some ways is similar to buying a new car. When buying a vehicle, you search various newspapers and websites to determine how much it is worth on the quest for the best value. A dealer may have a listing for a few thousand more or less than a neighboring one based on their inventory levels at any given time. If they really need to sell cars and clear their inventory they will be willing to "hit the bid" and negotiate a lower price. On the flip side, if you need to purchase the car right away then a higher offer price will be accepted to meet the need. In the same way, the inventory levels of the S&P are in continuous motion throughout the day based on the supply and demand for the contracts. The current price is what the market is advertising, but the true value of the contracts on any given day may be higher or lower. This is where market profile comes in. The value area is where 70% of the previous day's volume occurred at and serves as a point of reference for the current day's trading. Large institutions look to enter trades at high volume nodes based on the fact that significant volumes had occurred at the levels previously, providing a strong base for support and resistance zones. For the past 5 trading days, the value areas have been trading in a horizontal range, a signal that the market is in a basing pattern near the all-time highs. It is more of a bullish setup because it means that the bulls are maintaining the high prices until further catalysts occur that would bring in new buyers. Price action within the 1865-1880 will be more choppy because of the large volumes traded, but watch for a breakout of the range in either direction for a high probability trade, especially if the time & sales displays large size. Intraday edge is neutral/bullish.

Stock of the Day: Baidu, Inc. (BIDU)- Near all-time highs