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The "p" and "b" patterns


This is a question to all you MP pros out there...in Daltons new book and on various places on the internet ( this forum too) The "P" and "b" patterns are talked about. My question is this: Dalton says that when a "P" pattern forms then you can look for a retest of the "fat" part ( Largest tpo area/ High volume area) of the formation the next day. So if we open Higher look for sells and if we open below the "Bulge" of the "P" then look for buys....( reverse the concept for the "b" pattern).I'm wondering if anyone has found this to be true over time in the S&P's on a daily time frame? If not then have you found a longer term profile for this concept to be of greater statistical significance like the weekly profile etc.....thanks in advance

Bruce
Bruce,

With the advent of the Globex market and near twenty four hour trading it is tempting to believe that the U.S. Stock Index futures market has changed from the days of Steidlmayer's seminal writings on Market Profile. I suggest to you that basically it has not. The only thing new with the extended trading hours is the added noise and the distraction it causes. If we stick to basics we need not go astray.

Basically well over 80% of trading of the U.S. stock index futures is professional trading, the commercials, i.e. the big trading houses like Goldman Sacs and the like. Even the big foreign commercial money trades for the most part when the big U.S. money is trading, i.e. the old CME pit hours.

So the very low volume trading outside of CME pit hours is all but irrelevant for the most part. Obviously if a big international event should occur overnight (U.S.) time, e.g. Iran lobs a rocket into Saudi Arabia, then all bets are off and overnight trading becomes very significant.

It is the big players in the U.S. who have the muscle to buy at the unfair high and sell at the unfair low that determines if the market will trend or not. So my working assumptions are that basically nothing has changed with overnight trading. My job is still to identify the actions of the big players and follow in their wake, or with a good understanding of MP, be able to anticipate their action and trade along side. That said allow for the "P"/"b" probabilities set up by the trading during CME hours
Thanks DW, I know some who run Volume profiles of a 24 hour session and since there is usually so little Volume overnight the profiles donot change much. I agree with you that the big players aren't usually on board in the overnight session unless something BIG happens....

For those who like to trade overnight they can start running a new profile when the futures re open. I'm with you though, I prefer the regular day session. Thanks for the input.
I was watching the ES on Globex 2 days ago..Feb 11 and on my dome there was a lot of traffic.

The ES movement may be tight or move up and down by a lot of points...see the charts. The big boys have their men/women all over and screw with your mind. How else they going to make money? When you have the book, you can gap up or down, move up and down by a lot of points.Check the globex..you can see it.

You have to think like them even though you may know the numbers.

The ES...daily chart has been in a channel, so the highs and lows were easy pickings on a weekly basis. I'm expecting it to break to upside....until April. I could be wrong.

Given the last reversal +1 I was expecting the ES to zoom up becasue we had a nice WW pattern on the 15 min. However it went down. This is the first time I watched the dome...and it helped me. Plus 831 area was my special time... and they hesitated there...played the game....and dropped like a rock at the end.

Now I'm expecting ES and all other to go up till Apr time. So the reversal days may be up days.

Oh yes...I could be wrong.

Good luck