On August 11 I wrote that the large gap at 4425 in the Nasdaq futures ‘beckons’ and suggested that traders keep that level in mind, as it was the Volume Profile Point of Control for the Nasdaq. Such levels act as magnets… and we are almost there.

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The S&P 500, however, filled its corresponding gap yesterday and closed far below it, suggesting a more significant sell-off is now in progress.  Plus, the Volume Profile Point of Control for the ES is at 2092, which means it is not acting as a floor, it is the ceiling.

The strong volume spike at that level means there are now many trapped longs who are now under increasing stress. Some capitulated yesterday, but anyone who bought after February is now underwater and carefully considering their options.

The S&P futures have initial symmetry support around 2000. Symmetry support is measured by using the depth of previous swings that are similar in character, so look for a bounce off that level. That said, there is little volume support for the ES around 2000, so in my view 1941 is in play as the 1st reasonable Target.

Should that level fail to hold, there are a series of volume support levels below that the market is likely to stair-step toward. I’m not predicting that we will hit the bottom step (1741), but it’s always good to be prepared for the unexpected.

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