Today I’m showing the S&P futures rather than the Nasdaq futures since what happens in the larger indices will control the Nasdaq, at least short term.

The fulfillment of the bullish megaphone pattern that I pointed out in the Nasdaq futures last week did not come to fruition. There’s nothing more bearish that the failure of a bullish pattern, and vice versa, so, in my view, the market is in a pickle.  

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The S&P has the lion’s share of the volume each day, so it’s worth taking a look at the S&P’s  Volume Profile via the proxy of the ES futures. The Volume Point of Control is at 2088, and we are still in the gravitational field of that High Volume Node. So, there is no ‘emergency’ at this time, but there is a ‘situation’ below.

This is a 60 min chart from the day sessions, so it shows many gaps. True, the ES is very “gappy” and you can also see that those gaps are always filled, sooner or later.

There is one nagging unfilled gap around 2003, marked with thin magenta lines. That zone is a price magnet at this time. While several support lines exist at higher levels (the blue lines at 2064 and 2039), the Speedzone indicated on the chart makes the Lower Value Area at 1968-1981 the likely short-term target, if the sell-off gathers steam.

A Note on Volume Profile

The histogram on the left side of the chart shows the volume distribution in the Nasdaq futures for different periods of time. Key support and resistance levels are indicated by the peaks and troughs. If you would like to receive a primer on using Volume Profile, please click here